Canada’s dilemma over Meng Wanzhou and Huawei

With the detention of two Canadians in China, Canada is squarely caught in a China-US trade dispute. Is there much it can do?  

By: /
December 13, 2018
Meng
Members of the news media stand outside the BC Supreme Court bail hearing of Huawei CFO Meng Wanzhou, who was held on an extradition warrant in Vancouver, Canada, December 7, 2018. REUTERS/David Ryder

Now that Huawei CFO Meng Wanzhou has been released on bail in Vancouver — a common sense decision that reflects her health concerns and bona fides — attention will turn to next steps in the case involving US allegations against her. 

The United States alleges that Meng was personally complicit in giving untrue assurances to US financial institutions that Huawei was not involved in evading US sanctions on Iran.

There has been much speculation on what actions China would take ever since word of Meng’s detention was reported in the media, three days after her recent arrest in Vancouver International Airport (she was detained on the basis of a provisional warrant issued by the US Department of Justice).

China threatened “grave consequences” if Meng was not immediately released, in a strong message delivered to Canadian Ambassador John McCallum when he was called into the Chinese Foreign Ministry last weekend to receive Chinese protests.

Now it would appear that, by detaining former Canadian diplomat Michael Kovrig, as well as a second Canadian, Michael Spavor, China has moved by putting a counter on the chessboard, in a “like for like” escalation. This will only stiffen Canada’s resolve to follow through with its legal process, untainted by political interference.

Many details of the two cases remain unclear but the timing appears to be more than coincidental. Back in 2014 China detained two Canadian missionaries, Kevin and Julia Garratt, who had spent more than 30 years in China, on charges of espionage. It was more than coincidental that a few weeks earlier Canada had arrested and subsequently extradited to the US a Chinese national and Canadian permanent resident, Su Bin, who was accused of conspiracy to steal US military secrets by hacking into protected websites. Su pleaded guilty and was sentenced to almost four years in prison. China of course denied any connection between the Su and Garratt cases, as it no doubt will with regard to the detention of Kovrig and now Spavor.

What can Canada do? There is no question that we are caught in a difficult situation between two economic superpowers that are waging both a trade war and a race to dominate the next generation of technology. On the technology issue, the question of whether Canada will block Huawei’s participation in this country’s 5G networks is also at stake, with the US and some former members of Canada’s security establishment piling on the pressure to follow the lead of the US, Australia and New Zealand and bar a role for Huawei. To date, Huawei has been a good corporate citizen and made considerable investment in R&D in Canada. The arrest of Meng is an unwelcome complication. 

“There is no question that we are caught in a difficult situation between two economic superpowers that are waging both a trade war and a race to dominate the next generation of technology.”

Until Donald Trump’s unscripted remarks on December 10 stating that he would intervene with the US Department of Justice if this would help resolve trade differences with China, the US (and Canada) had maintained that the Meng case was a legal matter being pursued separately from any other bilateral differences, including those on the trade front. Trump’s comments undercut the statement of his own ambassador to Canada, Kelly Craft, in this regard and convey the impression that Meng was arrested to be held as a pawn in the US-China trade dispute. The open politicization of the process could backfire, as Canada would be well within its rights under the extradition treaty with the US to refuse to extradite someone accused of charges that are essentially political rather than criminal.

Another outcome could be the dropping of charges by prosecutors, getting Canada out of its current predicament. If this is the case, Canada will have been “played” for political purposes and future legal cooperation between Canada and the US could suffer a setback. Of course, Trump’s comments could be a throwaway remark and we may see the US justice system continue to prosecute the case to its conclusion.

At the moment, Canada appears to have little choice but to pursue the legal proceedings against Meng that are required by the extradition treaty while seeking more information from Beijing regarding the detention of Kovrig and Spavor, making representations to ensure that they are fairly treated. At the same time, we should explore channels to de-escalate this crisis and try to prevent further retaliation and linkage with other issues.

The lesson may be that as much as we value and need our relationship with the US, the US cannot be counted on not to take advantage of Canada. The remedy is for Canada to look after its own interests, whether these be a “made in Canada” decision on Huawei and 5G, the extent and nature of how trade relations are pursued with China, or a strict application of Canadian law when it comes to making a decision about whether Meng should be extradited if the charges against her are more political than criminal.