After the gratitude must come the reckoning

Thank God, Michael Kovrig and Michael Spavor are back home.

Understandably and quite correctly, that has been the immediate reaction to the news that the Chinese released their hostages within hours of Meng Wanzhou reaching a deal with the United States Department of Justice that released her from confinement in her multimillion-dollar Vancouver mansions.

After the gratitude, however, must come the reckoning.

For almost three years, the Chinese Communist regime insisted that a newfound commitment to the rule of law and to the independence of the judiciary meant that its government couldn’t possibly intervene in Kovrig’s and Spavor’s cases. Now, by some constitutional miracle, their government was able to cancel, commute, or otherwise disregard their sentences and put them on flights back to Canada.

The speed of the two Michaels’ return is almost as shocking as their initial detention. There was no attempt by the Chinese government to pretend that this had been anything but a quid pro quo all along, no procedural fig leaf to hide the fact that their indignant protests to the contrary had all been part of a lawless bluff. I would expect more shame from a terrorist organization.

In case we didn’t know it before, it is pellucidly clear now: this is an evil regime. Lest we forget, this is a regime that, in addition to engaging in hostage diplomacy (again: remember the case of Kevin Garratt?), is well into its third (or fourth? one loses track) ongoing genocide.

The Liberal-appointed “Independent” Senator Yuen Pau Woo has asked us to reflect on “lessons learned” from this affair. Ok, here are a couple of lessons for the Honourable Senator:

When we engage with the Chinese government, we deal with an outlaw regime that holds us in even lower contempt than the rule of law. And when we do business under their laws, we should do so with the expectation that those laws mean nothing, or rather will mean whatever the regime says they mean in its sole interest. Lessons learned.

This is a government that demands that Western countries censor themselves as well as Chinese citizens as the price of access to its growing middle-class consumer market, and companies from Silicon Valley to Hollywood to the NBA are all too eager to comply.

Worse, it has enlisted western social media and tech companies into constructing the surveillance state and the social credit system that allows the Chinese Communist Party to further insinuate itself into the lives of its citizens at home and abroad, including in Canada.

And yet we have continued to engage with them as though we can’t see what has been going on the whole time. No wonder China thinks it can continue to cheat, steal, and lie to our faces: we happily let them.

It is like we learned nothing from the 20th Century.

For almost a decade in the 1950s, the Dulles siblings were the most powerful family in the world. John Foster Dulles was U.S. Secretary of State, his brother Allen was Director of the CIA, and their sister Eleanor ran the Berlin desk at the State Department. When they sat down for Sunday dinner in one or other of the brothers’ stately brick Georgetown houses, they represented between them the totality of American Cold War policy, overt and covert.

Two decades earlier, however, the brothers faced a very different world.

Foster was the Chairman and senior partner of Sullivan & Cromwell, New York’s leading international law firm, where the younger Allen was also a partner. Alarmed by what he saw on a business trip to Germany in 1935, Allen wrote to his older brother recommending the firm close its offices in Berlin and Frankfurt before they became more entangled in Hitler’s consolidation of corporate power in the hands of the Nazi party.

According to Stephen Kinzer’s joint biography of the brothers, Foster “was stunned by his brother’s suggestion.” Their clients, Foster said, depended on them. The interests of the largest banks and corporations in the America, which included Standard Oil and General Electric, couldn’t be so easily sacrificed to Allen’s moral compunctions.

In the end, the moral suasion of Allen and the other junior partners prevailed over the more mercenary motives of the senior partners: Sullivan & Cromwell closed its German offices later that year and Foster even backdated the decision to cover his own ass, I mean, conscience.

I wonder if any such conversations are happening in Bay Street’s corner offices. And I wonder, if so, what the internal responses are from those with partnership shares, stock options, and year-end bonuses at stake?

We’ve heard for years from corporate Canada and Beijing’s shills on the importance of maintaining corporate ties to China. We have too much to lose, they say. Or we’re not economically important to China, so if we can’t change the system, why not take at least take their money? The implication is that by poking the dragon we’d be cutting off our nose to spite our face.

Better to be physically disfigured than morally disfigured.

Retaliation against the Chinese Communist regime would come with a price. No question. But it is not as high a price as Bay Street or Beijing would like you to believe. According to a report by the Macdonald-Laurier Institute, “Canada is not in such a weak position as we had believed [and] [w]e have options in countering China’s economic coercion.”

The report concludes that “[w]ith its growing economic size, China believes it can act at will against any country. Yielding to China’s coercion, economic or otherwise, will only embolden it.” In a similar vein, I concluded in a recent article of mine that “whatever the price of facing down China’s regime is now, it will only grow the longer it is put off.”

Yes, many Canadian businesses have entangled themselves in the Chinese market. For them, there should be no sympathy. They knew the risks of doing business in a country that did not believe in the free market or the rule of law. It is not our job to insure against their greed.

Other consequences for the Chinese regime should include Magnitsky-style sanctions against anyone involved in the detention and prosecution of Michael Spavor, Michael Kovrig, and Huseyincan Celil. These should extend further to sanctions against the families of senior regime officials involved in gross human rights violations, cutting off access to property, bank accounts, and university education in Canada.

For too long, our universities, our real estate markets, and our banks have relied on high-ranking Chinese officials and regime-connected Chinese businesses using Canada as a haven in which to park their wealth and their families. That needs to end.

Finally, it is time to reconsider the Foreign Investment Promotion and Protection Agreement (or “FIPA”) that came into force in 2014. According to a 2016 survey of its members by the Canada Chinese Business Council (an organization founded by the Desmarais family in 1978 to promote its businesses in China), only 9% saw a benefit from the FIPA.

So, cancel it.

There has been a lot of reporting about how Canada is locked into the FIPA for 30 or more years, but we are sovereign nation and we can abrogate any treaty we’ve entered into at any time. There may be reputational consequences to breaking a treaty, but they should pale against kidnapping as diplomatic leverage.

Finally, over the last year, the United States, Australia, Japan, the United Kingdom, India and several Asian-Pacific nations have been building alliances to constrain Chinese regional and global ambitions. At each stage, Canada has been notably absent. That should end.

We will be told by the well-remunerated China apologists that standing up for ourselves is crude belligerence and sabre-rattling (as though we had any sabres to rattle). Nonsense. It just means having a moral compass and aligning our foreign and domestic policies accordingly.

None of this should have been a hard call before today, but now that Michael Kovrig and Michael Spavor are free, there really are no more excuses.