Just a ‘phase?’: Morneau and Carr downplay trade risk from Huawei arrest

Canada’s trade and finance ministers are clinging to optimism that economic ties with China will be unscathed by the arrest of a high-profile Huawei Technologies Co. executive, characterizing the volatile situation as a “phase” and a “difficult moment” for the two nations.

Speaking on the sidelines of the International Economic Forum of the Americas in Toronto, federal Finance Minister Bill Morneau and International Trade Diversification Minister Jim Carr struck an upbeat tone on Chinese-Canadian relations in the wake of Meng Wanzhou’s arrest in Vancouver at the request of United States officials.

“The opportunity for us to work together with China, both for the Chinese, but also for Canadian jobs and business opportunities, is enormous,” Morneau told reporters Wednesday morning. “That will, from time to time, have some issues that we need to deal with. That’s the real world. We’re in one of those phases right now.”

Wanzhou was released on $10 million bail on Wednesday, following a 10-day stint in prison. The Huawei chief financial officer and daughter of the Shenzhen-based telecom giant’s founder has been ordered to stay in the Vancouver area under around-the-clock surveillance.

Wanzhou is fighting extradition to the U.S., where she faces multiple fraud charges related to her company’s alleged dealings with Iran. The United States has until the start of February to file for extradition.

The Dec. 1 arrest prompted threats of “serious consequences” from Chinese officials, who maintain Wanzhou’s innocence. On Tuesday, Ottawa confirmed the arrest of Michael Kovrig, a former Canadian diplomat, by Chinese authorities in Beijing.

“We have gone to the Chinese government to make the case for that particular situation. We’ve been speaking with the family,” Morneau said. “We recognize that this is a developing situation, and I don’t have anything more to say other than we will continue to support him and press our case.”

The Canadian government has not issued any changes to its travel advisory for China since late November. Asked about pending changes by reporters, Carr deferred to Public Safety Minister Ralph Goodale and Foreign Affairs Minister Chrystia Freeland, whom he said will be making an announcement on that subject “later this afternoon.”

Both Carr and Morneau reflected fondly on a recent trip to China, touting a surge in trade and tourism between Canada and the world’s second largest economy, while at the same time downplaying the impact of Wanzhou’s arrest and the legal battles on the horizon.

“This is a difficult moment. But we will endure difficult moments,” Carr told reporters. “I asked a friend when his company did their first deal with China. The answer was 1910. We will continue to have relations and do business with China for a long, long time.”

Carr and Morneau said the Wanzhou case is in no way political. Morneau declined to comment on reports that U.S. President Donald Trump would consider intervening in order to forge a better trade relationship with China.

“We have an extradition treaty with the United States. We will continue to assure that our judiciary system is independent from government,” he said. “My goal, and certainly the goal of our government, is to make sure that we continue to provide opportunities for Canadians through trade.”

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