OTTAWA (Reuters) - Canada is leaning on the United States to help settle a dispute with China, which has started to block imports of vital Canadian commodities amid a dispute over a detained Huawei executive.
In a sign of increasing frustration at what it sees as a lackluster U.S. response, Prime Minister Justin Trudeau’s government is signaling it could withhold cooperation on major issues.
China has upped the pressure on Canada in recent weeks over the arrest of Huawei Technologies Co Ltd Chief Financial Officer Meng Wanzhou, arrested last December on a U.S. warrant. It halted Canadian canola imports and last week suspended the permits of two major pork producers.
After Meng’s Vancouver arrest, Chinese police also detained two Canadian citizens.
Beijing is refusing to allow a Canadian trade delegation to visit, forcing officials to use video conference calls as they try to negate a major threat to commodity exports.
With no cards to play against China without risking significant economic damage, Canada has launched a full-court press in Washington, which is negotiating its own trade deal with Beijing.
The results have been meager.
“It’s a very challenging situation. When we raise it with the Americans they just say, ‘Dealing with the Chinese is tough’,” said a Canadian government source.
“It’s also not clear who we should be targeting since you never know who is up and who is down in the administration at any given point,” said the source, who requested anonymity given the sensitivity of the matter.
Among those the Canadians approached are Secretary of State Mike Pompeo, Agriculture Secretary Sonny Perdue, U.S. Trade Representative Robert Lighthizer and Republican Senator Jim Risch, chairman of the Foreign Relations Committee.
The State Department said it was "concerned" by the canola ban. In March, the Foreign Relations Committee responded to Canada's concerns by passing a bipartisan resolution supporting the country. (Graphic: tmsnrt.rs/2DOl1Zi)
Canada says the United States is obliged to help, given that the U.S. arrest warrant triggered the crisis with Beijing.
U.S. negotiators have rejected Chinese proposals to include the Huawei issue in their current trade deal discussions, according to a source familiar with the negotiations.
Canada’s U.S. ambassador David MacNaughton, who noted Canada has assisted the current U.S. administration on diplomatic efforts with Venezuela, Latvia and NATO, strongly suggested future requests for aid would not be met so positively unless Washington cooperated more.
“How do you go to canola farmers and relatives of the two (Canadian detainees) and say ‘Well, actually, notwithstanding all of this, we’re going to try and do whatever we can to help?’” he said.
“It makes it much more difficult in public opinion terms for the prime minister to have permission to do some of the things that would be in both countries’ interests.”
MacNaughton, who has cabinet-level status in Trudeau’s government, played a key role in negotiating a new North American trade deal last year.
Relations between Trump and Trudeau are formal at best. Officials in Ottawa have not forgotten that the president blew up last year’s Group of Seven summit in Canada by describing Trudeau as very dishonest and weak.
“At the political level, this administration doesn’t like us very much,” said a second well-placed source.
Intertwined with the China crisis is a second problem: the tariffs on Canadian steel and aluminum that Trump imposed last year on national security grounds.
Meng, who is under house arrest at her Vancouver mansion, next appears in court on May 8 ahead of an extradition hearing, in a process that could take years.
MacNaughton said part of Canada’s frustration also stems from a lack of information on U.S. intentions toward Meng. Trump has previously suggested the charges against her could be dropped if that would help the trade talks.
“What we’ve said is, ‘We’d like to have a little better sense of what your plans are in terms of dealing with her. Are you engaged in negotiations over a plea deal?’,” he said. “We’re completely in the dark.”
Additional reporting by Chris Prentice and David Brunnstrom in Washington; Editing by Amran Abocar and Lisa Shumaker