Published: Sun, August 12, 2018
Global Media | By Garry Long

Saudi-Canada row leaves United States in tight diplomatic spot

Saudi-Canada row leaves United States in tight diplomatic spot

Analysts are concerned about how the diplomatic spat between Saudi Arabia and Canada could escalate and what economic sectors could be impacted after the kingdom "put on hold all new business transactions" with Canada after Foreign Affairs Minister Chrystia Freeland criticized the kingdom for detaining women's rights advocate Samar Badawi.

In a press conference Monday, Freeland said Saudi students are still welcomed in Canada and that it "would be a shame for those students if they were deprived of the opportunity to study here".

Canada can easily replace the oil it imports from Saudi Arabia should relations with the Middle Eastern kingdom deteriorate to the point that trade in crude is halted, says an energy economist.

The dispute looks set to damage what is a modest bilateral trade relationship worth almost $4 billion a year. "This is something where we know we need to lead with our values".

Since the diplomatic feud erupted on Sunday, the federal Liberal government has said it stands by its decision to communicate its human-rights concerns with Saudi Arabia.

"It's estimated to be about 100,000 (barrels per day), and that's down over the past two years", McTeague said of Saudi Arabia's oil exports to Canada.

"The United States supports respect for internationally recognized freedoms and individual liberties including dissent and due process", said the spokeswoman, who asked not to be named. "We can't do it for them; they need to resolve it together", U.S. State Department spokeswoman Heather Nauert told a briefing. "They're friends, they're partners, as is Canada as well".

"We are in a world where 100,000 barrels per day is significant", Tertzakian said, adding that oil markets are now tight and only a few producing countries - including Saudi Arabia - have spare capacity.

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The dispute appears centered around tweets by Canadian diplomats calling on the kingdom to "immediately release" detained women's rights activists.

Reid said there are several factors playing in the agreement's favour: the Saudis would have to pay penalties if they walk away from the deal, a pullout could hurt the country's reputation with other global trading partners and, perhaps most importantly, Riyadh wants the model of armoured vehicle that's produced in London.

The European Commission also struck a neutral tone in its response, saying it is seeking clarification about the arrest of activists, but avoided being drawn into the dispute between Riyadh and Canada.

"We're not actually there yet and it could very well be avoided", she said.

"The only people buying oil from Saudi Arabia would be Irving".

Doug Wilson-Hodge, manager of corporate affairs for General Dynamics, said Tuesday that the company won't comment because the matter is between Ottawa and Saudi Arabia.

Tertzakian said the "natural substitute" for Saudi barrels would be crude from the USA, which is already the single-largest source of foreign crude in Canada.

Saudi Arabian crude and equivalents accounted for just nine per cent of Canada's crude imports in 2016, according to figures from Natural Resources Canada.

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