Canada’s business with China appears to be thriving during the pandemic even as diplomatic relations remain in a deep freeze.
Exports to China increased close to 10 per cent in the first seven months of the COVID-19 pandemic over the same period a year previous, according to new analysis from the Canadian International Development Platform (CIDP), which is part of the Norman Paterson School of International Affairs at Carleton University.
This growth occurred even as exports, by value, to many other traditional customers sunk during the pandemic, which hit Canada in March.
Overall, Canadian exports fell nearly 20 per cent in the same March to September period, CIDP’s analysis of Statistics Canada data shows. For instance, exports to the United States declined 22 per cent in this period.
Exports to China for the March to September period exceeded $14.7-billion, compared with $13.4-billion in 2019.
Aniket Bhushan, an adjunct research professor at the Norman Paterson School, said one of the reasons exports to China are growing is that sales are rebounding from a bad year in 2019 when China punished Canada for arresting Huawei Technologies chief financial officer Meng Wanzhou. China blocked sales of pork and beef for several months in 2019.
Still, Prof. Bhushan said, Canadian exports to China appear to be on track to exceed 2018 levels by the end of this year.
Perrin Beatty, president of the Canadian Chamber of Commerce, said Canadian exports to China are up in 2020 because China’s economy is one of the few that will grow this year. The country, where COVID-19 first appeared, recovered much more quickly than most and is expected to expand economic output by a modest 2.1 per cent this year.
Diplomatic relations between China and Canada have steadily eroded since late 2018 when Canada arrested Ms. Meng on a U.S. extradition request and Beijing locked up two Canadians – Michael Kovrig and Michael Spavor – in what Prime Minister Justin Trudeau has called an effort to exert “political pressure.” Beijing applied, and then lifted, restrictions barring imports of Canadian pork and beef, while Canada’s two biggest exporters of canola seed remain barred from shipping to the Chinese market.
In October, Deputy Prime Minister Chrystia Freeland denounced China’s ambassador to Canada for threatening Canadians living in Hong Kong, saying envoy Cong Peiwu overstepped his diplomatic role when he warned granting asylum to pro-democracy dissidents could jeopardize the “health and safety” of 300,000 Canadians living in the Asian city. Mr. Cong was also reprimanded by the Global Affairs department.
Trade data analyzed by CIDP show rising exports to China include ores, cereal grains such as wheat, meat, animal or vegetable fats, and vegetables. Statistics compiled by the federal agriculture and agri-food department show that in September, for instance, Canada exported 61,570 metric tonnes of pork to China compared with 346 tonnes in September, 2019.
Mr. Beatty, whose organization represents 200,000 Canadian businesses, said the political differences between Ottawa and Beijing should not be allowed to “contaminate our commercial relationships.” He said it “makes no sense for the Chinese to use imports of Canadian agri-food as a weapon” and that “politicizing trade” destroys the benefits of trade.
“Half a century ago, Canada supplied China with wheat when other countries refused to sell to them. It was the right decision, and both Canadian farmers and the Chinese people benefited,” he said.
Gordon Houlden, director of the University of Alberta’s China Institute, suggested that China is being pragmatic in dealing with Canada for economic and political reasons.
“I think there may be a desire not to make things worse on the political side because taking the two Canadians has not worked out and maybe there is a desire not to add economic pressure to the equation,” he said.
In a recent report, the China Institute documented how China is continuing to buy Canadian agricultural goods at a solid pace.
David Mulroney, a former Canadian ambassador to China, said that aside from arresting Ms. Meng – who is fighting extradition to the U.S. in a B.C. court – Ottawa has avoided taking significant measures that might antagonize Beijing.
By comparison, Australia has faced an increasing list of trade reprisals from China after challenging China in ways Canada hasn’t. Australia has banned Huawei from 5G networks, called for an inquiry into the origins of COVID-19, and led a pushback against authoritarian states by enacting a law to monitor agents acting for foreign governments.
Prof. Houlden said it would be unwise for Canada to try to decouple its trade with China. He added that trade accounts for 64 per cent of Canada’s GDP, compared with 24 per cent for the U.S. and 37 per cent for China.
“We are far more export dependent than China and we can’t maintain our prosperity without that, so [the] idea that we can’t or shouldn’t sell to China is not sustainable,” he added.
While Canadian canola seed exports continue to face targeted restrictions from Beijing, the China Institute report said 2020 has been marked by relative gains in both export value and tonnage. The cumulative value of canola seed exports to China has risen by 52 per cent on a year-to-date basis to $976-million. That’s still far below the $2.7-billion in canola seed Canada exported in 2018, however.
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U.S., UK, Germany clash with China at U.N. over Xinjiang
The United States, Germany and Britain clashed with China at the United Nations on Wednesday over the treatment of Uyghur Muslims in Xinjiang, angering Beijing by hosting a virtual event that China had lobbied U.N. member states to stay away from.
“We will keep standing up and speaking out until China’s government stops its crimes against humanity and the genocide of Uyghurs and other minorities in Xinjiang,” U.S. Ambassador to the U.N. Linda Thomas-Greenfield told the event, which organizers said was attended by about 50 countries.
Western states and rights groups accuse Xinjiang authorities of detaining and torturing Uyghurs and other minorities in camps. Beijing denies the accusations and describes the camps as vocational training facilities to combat religious extremism.
“In Xinjiang, people are being tortured. Women are being forcibly sterilized,” Thomas-Greenfield said.
Amnesty International secretary general Agnes Callamard told the event there were an estimated 1 million Uyghurs and predominantly Muslim ethnic minorities arbitrarily detained.
In a note to U.N. member states last week, China’s U.N. mission rejected the accusations as “lies and false allegations” and accused the organizers of being “obsessed with provoking confrontation with China.”
While China urged countries “NOT to participate in this anti-China event,” a Chinese diplomat addressed the event.
“China has nothing to hide on Xinjiang. Xinjiang is always open,” said Chinese diplomat Guo Jiakun. “We welcome everyone to visit Xinjiang, but we oppose any kind of investigation based on lies and with the presumption of guilt.”
The event was organized by Germany, the United States and Britain and co-sponsored by Canada, Australia, New Zealand and several other European nations. Germany’s U.N. Ambassador Christoph Heusgen said countries who sponsored the event faced “massive Chinese threats,” but did not elaborate.
British U.N. Ambassador Barbara Woodward described the situation in Xinjiang as “one of the worst human rights crises of our time,” adding: “The evidence … points to a program of repression of specific ethnic groups.”
She called for China to allow “immediate, meaningful and unfettered access” to U.N. human rights chief Michelle Bachelet.
Human Rights Watch executive director Kenneth Roth called out Bachelet for not joining the event.
“I’m sure she’s busy. You know we all are. But I have a similar global mandate to defend human rights and I couldn’t think of anything more important to do than to join you here today,” Roth told the event.
Ravina Shamdasani, deputy spokesperson for the U.N. Human Rights office, said Bachelet – who has expressed serious concerns about the human rights situation in Xinjiang and is seeking access – was unable to participate.
“The High Commissioner continues to engage with the Chinese authorities on the modalities for such a visit,” she said, adding that Bachelet’s office “continues to gather and analyze relevant information and follow the situation closely.”
(Reporting by Michelle NicholsEditing by Chizu Nomiyama, Alison Williams and Elaine Hardcastle)
Ex-finance minister breached ethics rules in charity dealings
Former Canadian Finance Minister Bill Morneau breached conflict-of-interest rules by not recusing himself when the government awarded a contract to a charity he had close ties to, independent ethics commissioner Mario Dion said on Thursday.
In a parallel probe, Prime Minister Justin Trudeau was cleared of having broken any ethics rules when WE Charity was tapped to run a C$900 million ($740.9 million) program to help students find work during the COVID-19 pandemic last year.
The charity later walked away from the contract.
Trudeau and Morneau both apologized last year for not recusing themselves during Cabinet discussions involving WE.
Trudeau’s wife, brother and mother had been paid to speak at WE Charity events in previous years, but Dion said this appearance of a conflict of interest was not “real”.
Morneau, on the other hand, was a friend of Craig Kielburger, one of the charity’s founders, Dion said. The charity had “unfettered access” to the minister’s office that “amounted to preferential treatment”, a statement said.
No fines or penalties were levied.
Morneau said on Twitter he should have recused himself. Trudeau said in a statement issued by his office that the decision “confirms what I have been saying from the beginning” that there was no conflict of interest.
Ahead of a possible federal election later this year, the opposition could use the ruling to underscore the government’s uneven track record on ethics. Trudeau has been twice been found in breach of ethics rules in the past.
In August 2019, he was found to have broken rules by trying to influence a corporate legal case, and in December 2017, the previous ethics commissioner said Trudeau had acted wrongly by accepting a vacation on the Aga Khan’s private island.
In a statement, opposition Conservative Party leader Erin O’Toole said: “To clean up Ottawa, Conservatives will impose higher penalties for individuals who break the Conflict of Interest Act and shine a light on Liberal cover-ups and scandals, ending them once and for all.”
The controversy over Morneau’s ties to the charity was a factor in his resignation in August last year, when he also left his parliamentary seat, saying he would not run again. Chrystia Freeland was named to take over for him a day later.
($1 = 1.2147 Canadian dollars)
(Reporting by Steve Scherer; Editing by Frances Kerry and Jan Harvey)
EU prepares new round of Belarus sanctions from June
The European Union is readying a fourth round of sanctions against senior Belarus officials in response to last year’s contested presidential election and could target as many as 50 people from June, four diplomats said.
Along with the United States, Britain and Canada, the EU has already imposed asset freezes and travel bans on almost 90 officials, including President Alexander Lukashenko, following an August election which opponents and the West say was rigged.
Despite a months-long crackdown on pro-democracy protesters by Lukashenko, the EU’s response has been narrower than during a previous period of sanctions between 2004 and 2015, when more than 200 people were blacklisted.
The crisis has pushed 66-year-old Lukashenko back towards traditional ally Russia, which along with Ukraine and NATO member states Latvia, Lithuania and Poland, borders Belarus.
Some Western diplomats say Moscow regards Belarus as a buffer zone against NATO and has propped up Lukashenko with loans and an offer of military support.
Poland and Lithuania, where opposition leader Sviatlana Tsikhanouskaya fled to after the election she says she won, have led the push for more sanctions amid frustration that the measures imposed so far have had little effect.
EU foreign ministers discussed Belarus on Monday and diplomats said many more of the bloc’s 27 members now supported further sanctions, but that Brussels needed to gather sufficient evidence to provide legally solid listings.
“We are working on the next sanctions package, which I hope will be adopted in the coming weeks,” said EU foreign policy chief Josep Borrell, who chaired the meeting.
The EU has sought to promote democracy and develop a market economy in Belarus, but, along with the United States, alleges that Lukashenko has remained in power by holding fraudulent elections, jailing opponents and muzzling the media.
Lukashenko, who along with Russia says the West is meddling in Belarus’ internal affairs, has sought to deflect the condemnation by imposing countersanctions on the EU and banning some EU officials from entering the country.
“The fourth package (of sanctions) is likely to come in groups (of individuals), but it will be a sizeable package,” one EU diplomat told Reuters.
More details were not immediately available.
(Reporting by Robin Emmott in Brussels, additional reporting by Sabine Siebold in Berlin, editing by Alexander Smith)
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