Arrest of Huawei CFO Sabrina Meng Wanzhou may kill Canada’s hopes for free trade deal with China

Amid an increasingly bitter diplomatic feud sparked by the detention of a senior Huawei executive in Vancouver, a highly coveted free trade deal between Canada and China looks increasingly unlikely.

The arrest of Sabrina Meng Wanzhou, chief financial officer of telecom giant Huawei – and China’s subsequent detention of two Canadians – has halted negotiations between the two countries. And as the United States prepares to request Meng’s extradition in the coming weeks, China has vowed to unleash punitive measures.

“This current problem with the extradition proceedings has caused a major disruption in the relationship, far beyond what might have been foreseen,” said Lawrence Herman, an international trade lawyer based in Toronto.

The prospect of a free trade deal with China, one of the world’s largest economies, has been especially tantalising to Canada, following a rocky and unpredictable period of negotiations with the United States, Canada’s biggest trading partner.

The bitterly contested talks, some fought in public, and US tariffs on Canadian aluminium and steel were widely perceived as a blow to the once-strong relationship.