OTTAWA (BLOOMBERG) - China is ramping up pressure on Justin Trudeau in a feud that already had the Canadian prime minister facing few good options.
The Asian nation halted certain canola shipments from Canada this month in the aftermath of last year's arrest of a top Huawei Technologies Co. executive in Vancouver on an American extradition request.
Officials in Beijing are now, in the same breath, defending the canola move and invoking Canadian "previous mistakes," in an apparent nod to the arrest of Meng Wanzhou, the tech giant's chief financial officer and daughter of its founder.
Trudeau doesn't have a clear solution. His government can't legally intervene in Meng's case at this point, even after President Donald Trump hinted she could be a bargaining chip in US-China trade talks.
The prime minister was already grappling with China's continued detention of two Canadians on national security grounds and a looming decision on banning Huawei from his country's next-generation wireless networks.
Now he's getting an earful from farmers whose crops are being turned away.
"This is part of the usual playbook that is used by China," Guy Saint-Jacques, a former Canadian ambassador to China, said Wednesday on BNN Bloomberg television.
Australian coal exporters are facing similar pressure tactics from Beijing, which struck a canola deal with Trudeau's government three year ago that was supposed to run through 2020.
"Nothing has changed in the meantime - except we have entered into this big bilateral crisis following the arrest of Ms Meng," Saint-Jacques said.
Billions in Trade
The northern nation shipped C$4.4 billion (US$3.3 billion) of the crop to China last year, according to the Canola Council of Canada. Beijing has confirmed the suspension of exports from Glencore Plc-owned Viterra Inc. and Winnipeg-based Richardson International Ltd.
Trudeau is considering sending a Canadian delegation for talks on the rejected orders.
China says the move is due to quarantine rules but hasn't yet offered evidence. China says it found pests in shipments that had already been cleared by Canadian inspections.
"The Chinese side has taken these precautionary quarantine measures to ensure safety," China Foreign Ministry Spokesperson Geng Shuang said Wednesday.
"As for China-Canada relations, we hope that the Canadian side could work with us to promote the sound and steady development of bilateral relations. The Canadian side should take some concrete measures to correct its previous mistakes."
In recent years, Beijing's displeasure with smaller trading partners including South Korea, the Philippines, and now Canada have all been accompanied by economic pressure through import restrictions, store inspections and safety warnings to Chinese tour groups.
Trudeau, speaking on Tuesday, cited diplomatic tensions as one cause for the canola problem. Jim Everson, president of Canada's canola council, supports the idea of sending a delegation.
"We're really eager to talk to China about the issues they've raised," Everson told BNN Bloomberg television. Farmers "are increasingly perplexed by what the issues are."
Meng was arrested on Dec 1. China detained Michael Kovrig and Michael Spavor, both Canadian citizens, on Dec 10. The two remain in Chinese custody.
Canada agreed this month to allow Meng's extradition hearing to proceed, a move that angered China. Meng then launched a civil suit in response.
Then on March 4, China's Central Political and Legal Affairs Commission said Kovrig had violated Chinese law by spying and stealing state secrets while working for the International Crisis Group, and said Spavor was his primary contact.
"It's unfortunate that we ended up in this mess, thanks to our friends, the Americans. We have to try to use all avenues to try to resume a dialog with China, to try to lower the temperature related to the case of Ms Meng," Saint-Jacques said.
"And let's not forget that we have two people in jail in China that are going through some very difficult interrogation problems."
Trudeau is weighing whether to ban or restrict the use of Huawei equipment in Canada's 5G networks. He said this week there's "significant concern" around privacy, though upside to Canadian businesses having cutting-edge technology.
He gave no timeline for a decision.
Wang Peng, an associate research fellow of the Chongyang Institute for Financial Studies at the Renmin University of China, said in spite of the canola pressure, China is backing away from its adversarial stance.
"The tough strategy has not worked so well. China has realised that Canada is much more reliant on America than China," he said. "Therefore China's strategy has become more rational, effective and realistic."
China shouldn't expect to be able to use pressure to stop legal cooperation between the US and Canada, since the countries share an extradition treaty, he said. Instead, China should focus on its legal fight to free Meng.
"Legal methods have become the mainstream approach," Wang said. "It is unwise for China to solve this problem through a primarily political approach."