Detention of Huawei CFO may endanger Beijing-Ottawa trade deal

World Today

More fallout followed the detention in Canada of Huawei’s Chief Financial Officer Meng Wanzhou.

The situation may jeopardize a potential free trade deal among other damage to China-Canada ties. CGTN’s Dan Williams had the latest from Vancouver.

Gone were the legions of media that camped outside the Vancouver home of Meng Wanzhou, the chief financial officer of telecom giant Huawei.

Meng had been ordered to stay near the house while she awaits proceedings to extradite her to the U.S. The reverberations of the arrest can be felt far beyond her quiet neighborhood. Canada said it simply abided by the rule of law when it arrested Meng.

Yet, it would appear the country now finds itself caught in the middle. “It is obviously a lose-lose situation for Canada. And nothing good is coming out of this,” said James Brander, Asia-Pacific Professor of International Business at the University of British Colombia.

Canadian agents detained Meng at the request of Washington, which claimed that Huawei used Hong Kong-based Skycom Tech as a shell company to dodge U.S. sanctions on Iran.

Two Canadian citizens, Michael Kovrig and Michael Spavor and have since been detained in China. Authorities there said they are being held on suspicion of engaging in activities that endanger national security.

It would appear the arrest of Meng Wanzhou could have a number of potential far-reaching repercussions. Canada and China have been working towards the completion of a free trade deal. Experts feel that in the current climate, any kind of deal is increasingly unlikely.

The prospect of a free trade deal with China was seen as particularly attractive for Canada, given its period of difficult negotiations with the U.S., the country’s largest trading partner.

There was more immediate concern for Canada’s Automotive Parts Manufacturers’ Association. They said Chinese automakers were putting plans to expand production into Canada on pause.

Also, Canadian officials put a temporary halt to tourism advertisements in China. “For British Colombia, the province that I am in, China is actually slightly more important than United States. And people are nervous. Quite rightly. So, yes, of course, businesses will be holding off on those investments in both directions,” Brander explained.