Trudeau Industry Chief Calls for Five Eyes Action on China

(Bloomberg) --

Canada needs to adopt a united front with its Five Eyes allies on China, according to one of Justin Trudeau's top ministers who handled trade, foreign affairs and is now in charge of industry.

Francois-Philippe Champagne helped craft the northern nation's policy toward Beijing and just revamped the rules for conducting national-security reviews of foreign investment.

In an interview this week, he stressed the importance of working with partners in the spy alliance -- the U.S., U.K., Australia and New Zealand -- to coordinate their approach to the rising Asian power. Important areas of collaboration include policy on critical minerals and sensitive technology, such as whether to ban Huawei Technologies Co. from next-generation wireless infrastructure.

With two of its citizens behind bars in China and scant leverage of its own, the Trudeau government has been increasingly acting with others. Along with the U.S. and U.K., it joined the European Union in issuing sanctions this month over the mistreatment of Uyghur Muslims and in February it rallied 57 other nations to sign a declaration against the use of arbitrary detention.

“It's bigger than just Canada,” Champagne said via videoconference Tuesday. “It's really Western democracy which is having a moment. That's why I feel that countries who share the same values and principles are keen to work together.”

The minister said the new foreign takeover review rules, which are focused on “national security concerns” in technology and critical minerals, are not targeted at one particular country. But he indicated that U.S. and other Western allies should be less concerned about them, adding it is important for Canada to welcome investment “with eyes wide open.”

Chinese Foreign Ministry spokeswoman Hua Chunying described Champagne's remarks as “narrow minded” during a regular press briefing Thursday in Beijing.

“Some in Canada draw a line based on ideology,” she said. “They form small cliques. They embolden themselves by colluding with some other countries. I don't think that works.”

So far, Canada is the only one of the Five Eyes not to formally ban or restrict Huawei equipment from 5G networks; New Zealand hasn't fully closed the door to the Chinese company. Champagne said the government “should be in a position to come back to Canadians and the market in a not-too-distant future” with a decision.

Making a call on the state-championed Chinese tech giant's access to 5G “is probably one of the most consequential decisions when you think about generations to come,” he said.

It's also one of the most politically delicate for the government.

Huawei is at the center of a geopolitical feud between the U.S. and China that's sent shrapnel Canada's way. After authorities arrested Meng Wanzhou, eldest daughter of the company's billionaire founder, in Vancouver on an American extradition request in late 2018, Beijing locked up two Canadians on spying charges. The men, Michael Kovrig and Michael Spavor, were tried this month but verdicts have yet to be announced.

With the government still deliberating, Canadian telecommunications companies are sidelining the firm in their 5G buildouts.

“When it comes to national security, you don't cut any corners,” Champagne said of the process, which he conceded has dragged on for “some time.” But “you do the full review, talk to the agencies, get the best advice possible and then you make the decision.”

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