- - Sunday, March 10, 2019

ANALYSIS/OPINION:

Despite enormous contrary pressure, including the taking of Canadian hostages in China, Canada is demonstrating once more reason why it is regarded as one of America’s most reliable allies.

There’s a diplomatic and commercial row over the detention of one Meng Wanzhou, the chief financial officer of Huawei Technologies Co., the huge Chinese electronics manufacturer, on her arrival at Vancouver on Dec. 1 last year. Miss Meng is the daughter of the company’s founder. Washington is seeking her deportation to the United States where Huawei Technologies, regarded like most Chinese companies as an organ of the Chinese Communist Party, is accused of violating U.S. and United Nations sanctions against trading with Iran.

U.S. officials are increasingly wary of Huawei for operating as an arm of Chinese intelligence services through its vast electronics manufacturing and sales contacts around the world. The U.S. government has moved to block its relations with U.S. companies it suspects of hampering American security interests.

The Canadians have been much more generous than the United States in tolerating ostensible Chinese commercial operations in Canada as they work for greater trade with Beijing. But they’re learning the costs of doing business with the Middle Kingdom.

Just 10 days after Miss Meng was detained in Vancouver, held in house arrest in lieu of $10 million bail and restrictions on travel within the country, China retaliated with the arrest of two Canadian businessmen, accusing them of conspiring to steal Chinese state secrets, the usual manufactured charge. The Canadian government said “the safety and security of Canadians is always of first order for this government. That’s why we’ve been engaging and standing up for the two Canadians who have been arbitrarily detained by China from the very beginning.”



Huawei Technologies has sued the Canadian government, police and border officials who claim Miss Meng’s rights were violated when she was detained at Vancouver International Airport.

Canada is aggressively courting international trade. Since 2003, China has been Canada’s second-largest trading partner, passing Britain and Japan. China now accounts for about 6 percent of Canada’s imports and exports, and between 1998 and 2007 Canadian imports from China grew by almost 400 percent.

Negotiations for a highly anticipated Canada-China trade treaty have been halted between the two countries. The U.S. request to deport Miss Meng will be considered at a hearing on May 8. China threatens further retaliation.

Canada, as a medium-size economy, has only limited leverage to diversify its trade. It wants to reduce its overwhelming dependence on trade with the United States, and expansion of trade with China looked tantalizing. Canada recently initialed a trade compact with the European Union, and is set to ratify the Trans-Pacific Partnership which would open up new markets, especially with Japan.

China was seen as one of the big prizes by Canadian trade negotiators. That’s despite the obvious risks of industrial espionage and Chinese thefts of intellectual property. The Chinese have demonstrated that they are cunning thieves. In recent years, for example, China has invested millions of dollars into North American universities, with critics warning that the numerous patents they gained through research partnerships with these universities could have a negative impact on infrastructure security as Huawei Technologies seeks to dominate the expanding field of 5G telecommunications technology.

The Five Eyes security intelligence-sharing network of the English-speaking democracies has twice cautioned Canada to beware of Huawei Technologies‘ growing presence in Canada. In the United States, similar concerns have been revealed in recent U.S. Senate hearings. But the Canadians have kept their consular agreements with Washington, as the arrest of Meng Wanzhou clearly demonstrates, even at the price of no small sacrifice.

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