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    The Morning Brief - 12.17.18

    Posted by Bruce Carson on Dec 17, 2018 8:18:28 AM


    Economy—Canada, China and the United States; An opportunity to Rethink Canada’s Approach to China

    Canada, China and the United States

    There is an argument being raised that Canada is slowly, through its actions or its government’s tendency to preachiness, finding itself more and more isolated in the world or at least among those western countries that Canada should be able to count on for support. This was the thrust of a column over the weekend in the National Post by Rob Gilles and Paul Wiseman.

    This phenomenon was illustrated in the USMCA talks as Canada’ position as America’s closest friend and ally was usurped by Mexico as the talks moved from trilateral to bilateral as the U.S. and Mexico focussed on common interests while Canada waited on the sidelines with Foreign Affairs Minister Freeland claiming that all was well as the U.S. and Mexico were dealing with auto issues only which had no effect on Canada. By the time Canada was let back into the talks it became apparent that much more than autos had been discussed and settled by the U.S. and Mexico.

    The talks had moved from Canada having Mexico’s back in the negotiations to Mexico telling Canadian negotiators that it was willing to go it alone with the U.S. should Canada not be able to make a deal. This was never more on display than in the public phone call between President Trump and President Pena Nieto announcing the finalization of the Mexico-U.S. deal and Trump being reminded on a number of occasions that Canada was also involved and matters had to be settled with Canada as well.

    Then there was the twitter diplomacy spat with Saudi Arabia where Canada was complaining about the incarceration of women, their treatment, and lack of observance of human rights in Saudi Arabia. Retaliation from the Saudis was swift as Canada’s ambassador was called in and sent home and students studying in Canada were ordered home or to find another place to study. Fortunately this order was partially rescinded as it related to medical students. 

    Again through all of what became a very public spat, not one country came to Canada’s defence, joining in the articulation of Saudi human rights abuses.

    Now Canada is caught in the middle of a trade dispute between two superpowers, the United States and China. Following the arrest in Vancouver of Huawei’s CFO Meng Wenzhou, two Canadians were arrested in China on national security charges. Initially Canada’s Ambassador to China John McCallum was not granted access but as of yesterday both detained men now had access to consular services. Huawei’s official was released on bail and now waits for the beginning of the extradition process.

    As has been well recorded while all of this was happening, President Trump dove into the pool claiming that he might intervene in the Huawei case if it would clinch a trade deal with China. Not the message Canada wanted as it was trying to explain the application of the rule of law to the Chinese; it didn’t think it would have to be giving similar lessons to the U.S. president.

    After a meeting at the end of last week in Washington both U.S. Secretary of State, Mike Pompeo and Minister Freeland addressed the issues in this case. Pompeo called the detention of two Canadians “unhelpful” and “unacceptable.” As the saying goes “all assistance, short of help." 

    Minister Freeland at the same media availability let the world know that any country seeking extradition should ensure “the process is not politicized.”

    Laura Dawson of the Canada Institute at the Wilson Center in Washington was quoted in this article as saying “normally Canada can count on the U.S. to back them up on such an issue.” It is unusual for Washington “to leave Canada hanging high and dry.”  Trump has made it clear that old alliances don’t matter so much anymore.

    Former Canadian Ambassador to China David Mulroney made the point that not only the United States but other western nations should be standing up for Canada. He argued that it would be nice if publicly and behind the scenes countries like the U.S., France, UK and Australia put in a word on our behalf.

    It is possibly the lack of action by allies and the position taken by the U.S. and China that may have caused both the National Post and the Globe to take positions advising Canada to change its position vis a vis China to one that is more realistic. The National Post started bluntly by writing “maybe now Ottawa will finally realize that Beijing is no friend of Canada.” It went on to say that maybe the arrest of two Canadians may make it impossible for Trudeau to keep turning a blind eye to the thuggish behavior of Beijing.

    It is argued that in pursuit of China’s wealth, the Trudeau government has lost sight of what communist rulers truly value. The examples of breach of human rights are well known: imprisonment of one million Uyghurs for practicing the Islamic faith and one hundred Christians arrested for running an illegal church. There are issues in the China Sea occasioned by China. 

    Neither Canadian should have been detained as they were not “endangering national security.” The editorial concludes that all of this should make it hard for our politicians to stop ignoring the immoral and dangerous nature of China’s rulers. “China is no friend to us.”

    The Globe added much along the same theme in that Canada can’t close our eyes to what the Peoples Republic of China really is. It stated that “treatment must be fair so China does not take advantage of Canada’s rule of law.” The relationship with China needs to be renewed “on more truth and honesty and less wishful thinking.” These actions by China should force the Trudeau government to “wise up about the nature of the Peoples Republic of China.”

    Andrew Coyne also wrote that the present crisis is an opportunity to rethink our relationship with China. He sets out a path forward: obtain the release of the two Canadians who are detained, no concessions and proceed with extradition.

    Coyne sets out that China wants a trade agreement with Canada and this should provide Canada with some leverage. He writes “we can do business with countries that do not share our values. We cannot do business with countries that make hostages of our citizens.”

    He concludes by setting out a choice “China can either join the community of civilized nations with the trade and economic benefits that go with it. Or it can carry on like a rogue state. It cannot do both.”

    The question is where do we go from here? Professor Ian Lee of Carleton University who has taught for years in China makes it clear in an article that there is “deep anger” in China over Meng’s arrest and it is his view that more retaliation could be coming unless this diplomatic spat is settled. It is his view that China will not let go until it has obtained the release of the CFO of Huawei.

    He suggests tripartite dialogue at the highest levels to resolve this matter. He argues that other Canadians could be at risk if Meng is not released soon. It is hard to see how this could happen and still keep Canada’s extradition process whole and free from political interference.

    It seems with this and other conflicts Canada has been involved with, there has been little support from allies that the quote from Lord Palmerston is perhaps truer today than at any other time that “countries don’t have friends; just interests.” At some point that may become clear to the Trudeau government particularly if it follows the advice in the Globe and National Post editorials.

    Former Ambassador to China Guy Saint- Jacques suggest in this morning’s Hill Times that Canada should engage in talks at the highest level with China and that Minister Freeland should go to Beijing to deal directly with this matter.

    One solution that seems to present itself now is to move on the extradition piece within the allotted timelines. Hopefully with consular access granted to Spavor and Kovig, there will be no more kidnappings related to this matter.

    In the meantime, as stated above, the Trudeau government should spend some time reflecting on the effectiveness of its China policy and update to take account of the world as it is, not as they would like it to be.

    To Come

    --December 18-19, U.S. Fed meets

    --December 18, monthly survey of manufacturing for October to be released

    --December 19, CPI numbers for November to be released

    --December 20, wholesale trade numbers for October to be released

    --December 21, retail trade numbers for October to be released

    --December 21, GDP numbers for October to be released--bc

    Topics: Morning Brief

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