Canada between two fires: a dramatic aggravation of Canadian-Chinese relations

Solyanova Maria, Ph.D., Research Fellow at the Center for North American Studies, IMEMO RAS

Canada has changed the level of a security risk for people visiting China from “normal” to “high degree of caution” due to “arbitrary enforcement of local laws”[i]. Until December 1, 2018, bilateral relations were progressively developing, and serious negotiations were underway to lift trade restrictions initiated by China. Even Canada’s consistent criticism of the situation around human rights in China and the demand to close the so-called “political education camps”[ii] did not help reduce the interaction between the two countries. Tensions between Canada and China began with the arrest of Meng Wanzhou, the Chinese corporation Huawei Technologieschief financial officer, at Vancouver Airport. She is accused of breaking the United States sanctions on Iran. Now Canada is awaiting the decision of the U.S. court on the extradition of M. Wanzhou who is under house arrest.

Surely, the negative reaction of official Beijing was not long in coming. The PRC sharply criticized the Canadian authorities, accused its decision to arrest the company’s financial officer of “unfriendliness”[iii], and also threatened “serious consequences”. The response included demonstrative arrests of Canadian citizens and closed trials on them – first arrests of a businessman and a former diplomat who were accused by the Chinese government of “conspiring to undermine national security” of the country, then a Canadian citizen for violating Chinese labor laws, and finally a death sentence for a Canadian citizen accused of participating in an organized international group involved in drug smuggling. At the same time, the rhetoric on both sides is harsh, Canada and the PRC express claims to each other in the politicization, bias, and prejudgment of the law enforcement agencies. In addition, the world community, in particular, the United States, the European Union, and Australia, also expressed their concern over the Chinese arrest of Canadian citizens.

Thus, Canada was in a difficult position. On the one hand, it cannot make a decision contrary to legal obligations to the United States, not only because the United States is the closest ally, but also because of bilateral extradition agreements that the Canadian government cannot ignore. On the other hand, this arrest became the starting point of the confrontation in relations with the PRC, which is Canada’s second largest trading partner[iv].

The beginning of the diplomatic crisis can have serious consequences for both domestic and foreign policy of Canada. If it fulfills its obligations to the United States and extradites M. Wanzhou as soon as Canada receives the necessary documents, then all the successes aimed at developing trade relations with the PRC, including the ongoing negotiations on the Free Trade Agreement, started back in 2012, will be leveled.

In addition to the deterioration of relations with China, internal political risks may await Canada. Canadian society and the media carefully monitor the situation around the arrests of citizens, as well as the actions taken by the government and Prime Minister J. Trudeau, in the first place. If the authorities fail to release their citizens and return them to Canada, this may adversely affect the results of the upcoming parliamentary elections to be held in October 2019, and in which J. Trudeau will participate as a candidate from the Liberal Party of Canada. Opposition parties have already taken advantage of the crisis situation and conditions in which the Prime Minister found himself, and blamed him for not speaking directly with Chinese President Xi Jinping. Also, the Prime Minister has been criticized in an insufficiently tough reaction and that, in addition to diplomatic measures and backstage negotiations, no tough measures have been taken against China, in particular, the expulsion of diplomats, the use of the Magnitsky Act mechanisms against a number of Chinese dignitaries, the initiation dialogue with Taiwan, visa restrictions.

Canada, in fact, became the aggrieved party in the ongoing trade war between the United States and China. It remains unclear why the United States demanded that Canada arrest the Chief Financial Officer of Huawei Technologies on charges of violating the sanctions regime against Iran, instead of introducing any restrictive measures against the company itself, as they did before. And right now, when the leaders of the USA and China have agreed to suspend the trade standoff and sign a compromise agreement by March 1. By the way, the second round of negotiations should take place about a week before the court session in Canada. American interest in M. Wanzhou’s case as an argument in negotiations with China became apparent from a statement by the U.S. President D. Trump in an interview with Reuters about his possible intervention if it leads to the largest trade deal ever made”[v]. Such statements by D. Trump only increase tensions and may push some countries to practice using the arrest of citizens of another country as hostages, a means of achieving their political or economic goals. At the same time, the possible intervention of the American president in the process of Canadian justice seems unlikely.

Time will tell how the Prime Minister and the Canadian government will get out of this situation. The next court session is scheduled for February 6th. But it is already clear that the troubles that Canada faced will have long-term implications for Canadian-Chinese relations. And M. Wanzhou’s case demonstrates to American allies and partners that sooner or later they may also suffer from the confrontation of the two largest economies in the world.






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