Tuesday, July 14, 2020

The case of Huawei: How that impacts Canada-China relations

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Nikhita Gautam

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The case of Huawei: How that impacts Canada-China relations

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Global Views 360

Publication Date

July 14, 2020

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Huawei office in Canada

Huawei office in Canada | Raysonho via Wikimedia

In December 2018, Meng Wanzhou, the Chief Financial Officer for Huawei, a China-based tech company which is dominating the telecom supplies, was arrested in Vancouver, Canada on her flight stop to Mexico. This was done on a request from the USA with whom Canada has an extradition treaty. She was sought by the USA for allegedly dealing with Iran using an American banking system in spite of the sanctions placed on Iran by the country, in 2013. In May, Wanzhou lost the legal challenge to the extradition process, meaning that they will go ahead with the extradition proceedings.

Within days of Wanzhou’s arrest, two Canadian citizens in China were arrested on alleged accounts of spying. This is seen as a retaliation for the Wangzhou arrest by the Canadian Prime Minister Justin Trudeau, who says that there is a direct link between Wanzhou’s arrest and those of Michael Spavor and Michael Kovrig,  the Canadians who are detained in China. Though China has been tight-lipped about the link between the two, these two incidents are often raised jointly by the Chinese spokesperson. David Mulroney, former ambassador for Canada to China, has said that the officials in Beijing are mirroring the ongoing extradition case to that of the detained Canadians.

Although Mr. Trudeau has in the past repeatedly emphasized the need for good relations with China, and has enthusiastically worked on them to the point of agreeing to discuss a Canada-China extradition treaty. But the China-Canada relations already started souring much before the arrest after a trade deal fell through in 2017. Many major carriers in the country, some of which have been outspoken in their support of Huawei, have decided to shun the company and opt for western alternatives instead. One of them, Bell Mobility, even announced that it will use equipment from its Finnish rival, Nokia.

Huawei is considered a symbol for China’s technological prowess, and the arrest is seen by the Chinese Communist Party as an attack on its symbol of technological achievement. The Chinese state-owned newspaper the Global Times calls the act a “political persecution launched by the US, with the intention to contain China’s high-tech development.” The China Daily also criticized the court ruling as unfair and potentially harmful in mending the Canada-China relations.

There has also been a backlash from legal experts and family members of the detained Canadians on the Canadian policy of letting the extradition charges proceed and not going with a prisoner swap. Mr. Mulroney, however, feels that it would legitimize “hostage diplomacy”, which would put at risk all traveling Canadians for arbitrary arrests to gain political leverage. There is a stark difference between the condition of the hostages and that of Meng Wanzhou, for while the two prisoners spend their days in small cells in isolation, interrupted by interrogation and bland meals, Wanzhou lives in her Vancouver mansion, being happy about the fact that she can spend more time reading and oil painting, now.

The Canadian government is also claiming that it has to let the extradition process go on without political interference as to not compromise the independent, legal decision of surrendering the Huawei CFO. Mr. Mulroney has said that “it wouldn’t be the right thing to do. It would compromise the integrity of both our democracy and our justice system,” and that their values need to count for something. Brian Greenspan, a Toronto lawyer with experience on extradition cases, has said that the government has the power to withdraw from the extradition case, and that the lessons from a previous case in which political pressure affected an international case, are being applied wrongly here.

There are many sides to this tension, complicated by previous feuds, economic decisions, the detentions of the Canadians and Wanzhou and the difference between the political and the legal, and the many opinions on whether it should be that way.

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February 4, 2021 5:11 PM

How the French government is using Brexit for its economic advantage

Brexit is an abbreviation for "British exit," which refers to the decision of the UK to leave European Union (UK). The decision to leave the EU was put to a referendum on June 23, 2016 by the then Prime Minister Boris Johnson, which resulted in a 52% to 48% majority for those who called for the UK to leave the EU.

The UK had joined the European Economic Community in 1973, and later became the founding member of European Union in 1992. The entry of the UK had always generated opposition from a section of the political spectrum in the country. It was earlier opposed by the left wing parties followed by the Eurosceptic parties like UKIP (United Kingdom Independence Party) and later propagated by a section of Conservative party.

After a lot of false starts, the UK Parliament ratified Brexit which specified that the UK will leave  the EU on 31 January 2020. An eleven month long transition period was also specified to enable the UK and EU to negotiate their future relationship. During this transition period the UK will remain subject to EU law, remain part of the EU customs union, and single market, but no longer be part of the EU's political bodies or institutions.

Euro, the currency of European Union | Source: Markus Spiske via Unsplash

The loss of the UK, the largest non-eurozone member of the EU means that the focus shifts towards the eurozone members but more importantly it leaves a 75 billion euro deficit in the EU’s budget and raises questions regarding its future direction. In the absence of the UK, it would be challenging for the EU to continue its commitment towards fiscal responsibility, free trade and enlargement of the block.

A 2019 report from New Financial Aid cited that Britain’s exit from the EU would mean the bloc losing its biggest financial centre, London. It also mentioned that many business hubs and financial organizations had started opening hubs in the EU to cope with Brexit.

As per New Financial Britain accounted for almost one-third of the entire capital market activity of the EU, which is more than France and Germany combined. The report had suggested that France and Germany would have a “duopoly” in most major financial sectors post UK’s exit, with France being the dominant in most of the sectors.

Emmanuel Macron, President of France | Source:  Presidencia de la República Mexicana via Wikimedia

The two biggest economies of post-Brexit EU, France and Germany have taken different public postures on Brexit. The president of France, Emmanuel Macron has termed Brexit as a blessing in disguise for France and an opportunity for “European renaissance.” His German counterpart, Angela Merkel has however, chosen to remain silent on the issue.

France has taken an aggressive stance on attracting business away from the UK ever since the 2016 referendum in the UK was won by the leavers in the UK. France under president Macron has rejigged its tax system and reformed its labour laws to create a more business-friendly environment.

Paris had also initiated a poster campaign with the slogan “Tired of the fog? Try the frogs!” in a bid to drive financial investments from London in the wake of the Brexit developments in late 2016. Officials from Paris had also assured stability to the British businesses citing that Paris would be the only global city left in Europe after the exit of Britain.

Arnaud de Bresson, managing director of Paris Europlace, the organization responsible for promoting the financial sector in France points out that Paris is well ahead of its competitors in the EU-27 bloc with nearly 180,000 employees in the financial sector. The next best figures are from Frankfurt with 70,000 workers from the financial sector as per the report by the organization. Brexit has resulted in nearly 80 to 100 financial businesses from London relocating nearly 4000 jobs to Paris, and as per de Bresson this process is “likely to accelerate”.

The French Economy Minister, Bruno Le maire had said in February 2020 that Paris would become the leading financial centre in Europe in the wake of Brexit. He even went ahead to say that the French economy “must take advantage of Brexit”. However, his statements are not exactly accurate. The UK still remains the undisputed leader in the financial sector with 250,000 employees and 7% contribution to its GDP.

French senator Christian Cambon | Source: Boicaro via Wikimedia

French senator Christian Cambon who serves as the co-chair of the Senate Brexit Committee had warned in 2019 that Brexit could have adverse impacts on a few sectors of France’s economy. "Our farmers, our fishermen, our businesses, and the regions of Normandy and Haute France. It will have consequences for all these areas and for the whole of the EU, it could even give other members some ideas. That’s why we want to follow the process step by step while abiding by the competences of the Senate." French fishing industry members have had concerns over being denied access to British waters post Brexit, considering that 75% of fishing taking place in Haute France is in British territorial waters.

However, President Macron remains as optimistic as ever regarding Brexit’s impact on the nation’s economy and has been actively promoting his nation via a series of reforms to attract businesses and investments. He also launched the 'Choose France' package which provides financial help and English-language support to UK based businesses that want to move to France.

The short-term projections are pointing to be somewhat in favour of France, it remains to be seen if Brexit will have a positive impact on the nation’s economy in the longer run or the UK will have the last laugh.

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