After a couple days of calm, and China finally releasing its thoughts about the dinner between its President Xi and U.S. President Trump, an arrest has put the two countries back on edge.
It was announced on Wednesday that over the weekend, Meng Wanzhou, the CFO of Huawei, was arrested at Canada’s Vancouver airport. According to multiple reports, the arrest was encouraged by the U.S, based on violations of Iran sanctions.
The arrest drove the stocks and commodities market lower on Thursday, and has since complicated relationships among all three countries involved.
With recent optimism on increased agricultural trade with China, questions now arise on how this impacts Canada that is fresh off an announcement to double agricultural trade with China by 2025.
Agriculture and Agri-Food Canada (AAFC) reinforced with RealAgriculture on Thursday that, “at the Canada-China Economic and Financial Strategic Dialogue (EFSD) both sides agreed to provide a favourable environment and strive to achieve the goal of doubling agricultural trade by 2025. In 2017, two-way agricultural trade between Canada and China was $9.6 billion.
But does this development change how China views Canada?
In a move China has called “hooliganism” by the United States, the bail hearing will be held Friday. There’s pressure from the U.S. for Canada to extradite Ms. Meng, with increasing pressure also by China to allow her release. Canada is in the middle of a national security hot potato that was known about by Prime Minister Trudeau and John Bolton, U.S. National Security Adviser, prior to the arrest.
With an extradition that could take more than two years to process, many market analysts are wondering how this new development changes the 90 day trade truce for the U.S and China. This week the commodity market has been exuding a “show me” attitude to potential improved China trade relations.
“#Sanctions violations aren’t among the extraditable crimes described in the treaty, though there are provisions for fraud by a corporate officer and receiving proceeds from illegal activity.” #Compliance https://t.co/WSG8x8eSok
— Mark Warner (@MAAWLAW) December 7, 2018
For an intense background on how we got to this point, check out this summarization by the Globe and Mail who has been closely following the saga between Canada and Huawei for quite some time.
Prime Minister Justin Trudeau says his government had no involvement in the arrest of a top executive from Chinese telecoms giant Huawei.
This is a reminder that we need to take seriously the risks of doing business with companies like Huawei and allowing them access to our markets. I continue to strongly urge our close ally Canada to reconsider Huawei’s inclusion in any aspect of its 5G infrastructure.
— Mark Warner (@MarkWarner) December 6, 2018
On Thursday’s edition of RealAg Radio, host Shaun Haney spoke to the official opposition’s shadow critic for the AAFC, Luc Berthold about the arrest and whether it threatens Canadian trade with China. Berthold stated, “I hope not. This is a serious national security matter. They are working on 5G in Canada but there is fear the Chinese government can access information we don’t want to share with them.”
RealAgriculture reached out to several farm groups on the matter and all refused to comment at this time.
For any of you that were wondering which side Canada would pick, you may have got your answer as the arrest happened in Vancouver.
— Shaun Haney (@shaunhaney) December 6, 2018
This story will be updated as more information becomes available.