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Fed up Canada tells U.S. to help with China crisis or forget about favors

Stock MarketsMay 05, 2019 01:56PM ET
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© Reuters. FILE PHOTO: Picture of Canadian and Chinese flags taken prior to the meeting with Canada's Prime Minister Justin Trudeau and China's President Xi Jinping at the Diaoyutai State Guesthouse

By David Ljunggren

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: https://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."

Fed up Canada tells U.S. to help with China crisis or forget about favors
 

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Comments (4)
Picaso Fish
Picaso_Fish May 19, 2019 8:19PM ET
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You really expect him to quarrel with China? He has an election to win, he can't play the long game now. Either could the conservatives fyi. We don't have that type of leadership in Canada. Can't say I blame them either.... this is how the game works
Chris Sundo
Chris Sundo May 11, 2019 7:39AM ET
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Trudeau should not act so weak. Canada is a Democracy. We can't make exceptions to democratic rules including extradition treaties because uncle Xi doesn't like the rules the way they fall this time. === We must put democratic rules ahead of China. === Source your biz elsewhere Trudeau and don't sell out your countriy's scarce mineral resources to China. There will be others to buy it later from tou.. Show China a fist and block resource exports. Better to tread water for a while than letting China compromise democratic rules. Don't look to the USA for help. That would be stupid and doesn't look strong. The issues are pretty clear. We have to cut China out of Canada until China chooses between Meng and non-Meng business.
Richard Broome
Richard Broome May 07, 2019 6:25AM ET
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Trudeau is dishonest and weak.he's a puppet that just being controlled.
parminder dhillon
parminder dhillon May 05, 2019 9:34PM ET
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Trudeau has a very short time calculator.
 
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