Canada Drops Free Trade Talks with China

Free trade talks between Canada and China have come to a complete halt amid tensions over a Huawei executive arrest and two Canadians’ imprisonment. Many experts are not surprised; instead, they believe it may be better off for Canada since most of China’s previous trade deals with other developed countries did not go well.

What led to the tension between Canada and China?

According to foreign minister Francois-Philippe Champagne, “the China of 2020 is not the China of 2016.”

This statement signals a complete shift in Canada’s policy to align more with the viewpoints of the US, Australia, and parts of the European Union (EU). It has completely reversed the policy of Prime Minister Justin Trudeau as well, who first started the free trade agreement talks after visiting Beijing in 2016. 

Tensions between the two countries officially began in December 2018, when Canada arrested Meng Wanzhou, a chief financial officer of Chinese telecom company Huawei Technologies, on a US warrant for fraud. Days later, China arrested two Canadians, a former diplomat Michael Kovrig and businessman Michael Spavor, under suspicion of spying. Many thought this move was a retaliation against the arrest of Wanzhou, but China has denied such claims.  

This tensity has only intensified further after China enacted a new security law in Hong Kong against the disapproval of many liberal countries worldwide. This new law and China’s suppression of the Uighurs living in Xinjiang have ultimately led Canada to abandon its extradition treaty with Hong Kong.

What does the future hold for the two countries?

Canada’s main priority at the moment is to get the two Michaels back to its country safely. According to Champagne, Canada will also be revisiting all the previous policies and agreements made with China back in 2016 to make any necessary adjustments needed to match the new 2020 China. However, it is also essential to keep in mind that despite the growing tensions, China remains as Canada’s second-largest trading partner after the US. In fact, according to Manila Bulletin, Canadian exports to China went up 23.6%, while imports increased 13.9% from the beginning of the year to July 2020. If the two countries cannot resolve their issues anytime soon, it may leave a detrimental effect on both. Only time will tell how the two will work everything out. 

Learn More with Export Portal

Export Portal knows how important it is to stay updated, especially during such an unprecedented time. For more updates on international news, make sure to check out the rest of our blog!