Canada's delayed decision to ban Huawei Technologies Co 5G equipment is putting pressure on Ottawa to deliver on a promised Indo-Pacific strategy, and to further diversify supply chains and reduce reliance on China for things like critical minerals, which is emerging as the battleground for clean technology.
Last week's decision to ban Huawei 5G gear was the last vestige of a diplomatic dispute with China that dates back to 2018. With that, Canada joined its Five-Eyes intelligence-sharing partners United States, Britain, Australia and New Zealand to ban Huawei equipment over national security concerns.
Canada's decision was complicated by diplomatic tensions, after the detention of Huawei executive Meng Wanzhou in 2018 and Beijing's subsequent arrest of two Canadians on spying charges. The standoff ended when all three people were released in September after U.S. prosecutors reached a deal with Meng.
The same month, the United States, Britain and Australia signed a security pact for the Indo-Pacific, and this week Washington launched an economic engagement plan in Asia, all with an eye to managing Chinese hegemony in the region.
Trudeau delayed the Huawei decision in 2019 because he was reluctant to move until the fate of the Canadians held in China became clearer, sources told Reuters at the time. Coming much later than America's action, Canada is now playing catch-up on its Indo-Pacific strategy.
Canada also needs powerful partners to have influence there, and Prime Minister Justin Trudeau's government has promised to come up with an Indo-Pacific strategy of its own.
"The word is out that Canada is just not as reliable a partner as it used to be," said Charles Burton, a Senior Fellow at the Macdonald-Laurier Institute policy think tank and former Canadian diplomat who served two tours in China.
"Australia, the UK, and the U.S. are collaborating on security in the Asia Pacific, and last time I looked at the map, the UK was not an Asia Pacific country, but Canada is," Burton said.
Trudeau has said Canada does not need to be part of the security pact. On Tuesday, he said Canada belongs to the Comprehensive and Progressive Trans-Pacific Partnership and another trade agreement in Asia is unnecessary.
The government is working on "a way forward" on its Indo-Pacific strategy, a source familiar with the matter said.
The future Indo-Pacific strategy will be aimed at engaging with China on trade and things like fighting climate change, while competing in other areas like critical minerals, and confronting it on human rights issues, the source said.
Canada is already taking action to develop a domestic supply chain for critical minerals needed for electric vehicles and energy storage to wean it from dependence on China, which is by far the world's largest producer.
Here Canada has partners. Last year, Canada and the European Union launched a strategic partnership on raw materials to reduce dependence on China, and officials have open channels with the United States on providing critical minerals there.
Canada's 2022 Budget in April proposed C$3.8 billion ($3 billion) in investments over eight years to boost production and processing of critical minerals.
After Huawei, "the Canadian government is much more mindful of the vulnerabilities created by dependence on China for critical materials in supply chains," said Roland Paris, a former foreign policy adviser to Trudeau and professor of international affairs at University of Ottawa.
(Reporting by Steve Scherer; Editing by Denny Thomas and Nick Zieminski)
