2018-08-07 00:55:21 UTC
Saudi Arabia freezes new trade, investment after Canada demands activists be freed
"We consider the Canadian ambassador to the Kingdom of Saudi Arabia persona non grata and order him to leave within the next 24 hours," Saudi Arabia's Foreign Ministry said on Twitter.
"Any other attempt to interfere with our internal affairs from Canada, means that we are allowed to interfere in Canada's internal affairs," it said.
The LAV Deal
In February 2014, the Conservative government announced the largest arms export in Canadian history, a $15 billion deal for the sale to Saudi Arabia of light armoured vehicles (LAVs) and associated weapons systems, spare parts, and technical data. Since assuming power in 2015, the Liberals have decided to uphold the deal. There has been, however, a chorus of criticism, led by a decidedly activist Globe and Mail and civil society organisations.
As with the relationship with Saudi Arabia, there are strong arguments for and against the deal. On the positive side, it is consistent with Ottawa’s interests in the preservation of the partnership with Riyadh. It also supports Canada’s vital interest in being, and being perceived as, a good ally: the deal represents an important Canadian contribution to the maintenance of the U.S.-led West’s partnership with Saudi Arabia. It is therefore not surprising that Washington has issued permits to authorize the export of U.S.-origin parts to General Dynamics Land Systems Canada (GDLS-C), the manufacturer of the LAVs.11
The deal is also very good for Canada’s defence industry, which represents 650 firms and 65,000 jobs contributing $6 billion annually to GDP.12 The sale of the LAVs will represent about 3,000 additional jobs for 14 years. The deal also boosts expertise and research and development in Canada’s defence industry. By contributing to economies of scale, it will help the Canadian Armed Forces purchase better materiel at lower prices.13 By acting as a business card of sorts, the deal also better positions Canada to develop trade with GCC countries.
The Liberal government has justified its decision to uphold the deal by the need to respect an agreement reached under the previous government, claiming that not doing so would damage Canada’s credibility.14 This in itself is not sufficient; it would be possible and indeed rational for the new government to reject the deal if it assessed that costs exceeded benefits. But this does not make the credibility argument irrelevant: respecting deals made under a previous government is not an inviolable norm of international affairs, but it is a rule that is broken at some reputational cost. It would also have opened up the possibility of litigation by Riyadh.
Critics have mostly argued that Saudi Arabia’s abysmal human rights record is reason enough to cancel the sale.15 They raise Saudi Arabia’s atrocious performance – the treatment of women, discrimination against its Shia minority, the absolute authority of the Saudi ruling family – and its brutal prosecution of the war in Yemen. In response, the government has repeated that in its assessment, it is unlikely that the LAVs would be used directly to violate human rights.16 The Globe and Mail, however, has put forth evidence to counter this claim, providing videos of Saudi troops using (non-Canadian) LAVs to quell protests in the Shia-dominated Eastern Province.17 Saudi troops also used previously-acquired Canadian-made LAVs when they entered Bahrain in 2011 to help Bahraini authorities quell street protests there (though the vehicles were not directly used against protesters).
Critics have called on Ottawa to suspend the sale of the LAVs to pressure Riyadh to pursue domestic reform. The problem with this suggestion is that it would not work: the Saudi regime is not susceptible to external pressure from a second-tier power such as Canada. Should Ottawa cancel the deal, Saudi Arabia would simply buy similar vehicles elsewhere without changing its policies. It is not inconceivable that Canada could succeed in tying the LAV deal with the release of Raif Badawi, a jailed blogger whose family is in Canada, as some have suggested.18 If it is not already doing so, the government should certainly try. That said, as desirable as Badawi’s release is, if it does happen it should not be confused with any Canadian influence on structural reform in Saudi Arabia. Riyadh would only accept to release Badawi to quiet down the external scrutiny, but it would not go farther.
The decision for Canada then comes down to assessing whether the moral gain from cancelling the deal is worth the strategic and trade costs discussed here: an abstract moral benefit against concrete short-term material losses, the risk of losing longer-term opportunities, and the failure to support the flawed but necessary partnership with Saudi Arabia. Viewed through this lens, it is the right decision to uphold the deal: Canada has to hold its nose, but the short and long-term gains are important.
Even if the decision to support the LAV deal is the right one, it is useful to look briefly into Ottawa’s poor handling of the issue. The Liberal government has not been consistent and has conveyed inaccurate information in trying to make its case. Early on, it minimized the deal, especially when candidate Trudeau dismissed the LAVs as “jeeps”. Later, the government claimed that it was a done deal, agreed to under the Conservatives, and it emphasized the damage to Canada’s reputation that would follow should the deal be cancelled.19 In other contexts, it has emphasized the economic benefits and the backlash should it refuse to move ahead.20 Finally, the government has also claimed – rightly – that in any case, cancelling the deal would not have any effect on human rights in Saudi Arabia and would merely allow another country to sell the vehicles.21
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The LAV sale smells foul: providing advanced weapons to a regime with an atrocious human rights performance is not a decision to be taken lightly. A sober weighing of its pros and cons and of how it fits in the broader partnership between Saudi Arabia and the West, however, leads to the assessment that the government is right to uphold the deal. Ultimately, Canada must deal with the Saudi Arabia that is, not with the one it wishes would be.
Looking ahead, Ottawa should be more consistent and transparent in its handling of the issue. The Liberal government should be more forthcoming on the strategic rationale justifying the deal while being transparent on the abysmal state of human rights in Saudi Arabia. By explaining the tensions inherent in making difficult foreign policy choices, it would arguably make a stronger case. The government should also seize the momentum provided by the deal and continue investing in the expansion of Canada’s trade ties with Saudi Arabia and the GCC. Canada should also try to increase the already sizable contingent of Saudi students here, while pursuing more initiatives such as Algonquin College’s Saudi campus. Such educational exchanges create networks between young Saudis and Canada and provide them with a quality education emphasizing critical thinking and cosmopolitan values. In the long-term, it is one of the best ways to exert change in Saudi Arabia.
It is the right approach – or, more precisely, the least bad – to maintain the partnership with Saudi Arabia. That said, there is scope for calibrating Canada’s initiatives at the tactical level. One priority for Canada in the Middle East is to avoid entanglements; Canada should therefore refuse to endorse, let alone participate, in the war in Yemen. Also, it is in Canada’s interest not to put too many eggs in the Saudi basket. Diversification allows Canada to maximize its potential gains with all GCC countries while mitigating the costs of ties with what is undeniably a heavily flawed partnership with Riyadh. Canada, in sum, can reap benefits from its difficult ties with Saudi Arabia, but to limit the costs it should continue hedging by further developing its ties to other GCC states.