Analysis Of Canada’s Arms Trade With Saudi Arabia

(Written in the POV of Global Affairs Canada)

The Department of Global Affairs Canada under North America, Trade Policy and Negotiations (TND) has prepared the following paper in order to discuss how best to move forward with Canada’s arms deal with Saudi Arabia. This issue is important because it gained importance after the recent killing of Saudi journalist, Jamal Khashoggi. Because of the recent murder, Canada has been thinking of suspending or even terminating its’ export of light-armored vehicles. For the reason that Germany, Finland, and Denmark have already stopped their arms sales to Saudi in response. Even NDP Leader, Jagmeet Singh, and former Trudeau foreign policy, Roland Paris are asking the Canadian government to respond the same. “Much of the current glow and expectation about Canada’s leadership is due to Prime Minister Trudeau, who assumed office in November 2015, following almost 10 years of a conservative government that took the country down an unpalatable “Canada-first” path. (Clark & Horton, 2018, p.1644).

Others have found this contract as an important milestone from the former Prime Minister Stephen Harper’s Conservative government because it puts Canada in the playing field for the international arms trade. “Moreover, given the “totemic value” of defense spending and military interests more generally for conservatives’ parties, the pursuit of this contract – and military exports more generally – by the Harper Conservatives is unsurprising” (Gutterman and Lane, 2017, p.80). This arms deal could also create 3000 new jobs in Canada over the next 14 years, and support new research and innovation opportunities for Canada’s defense industry. However, “Public opposition has been clear: 73 percent of poll respondents in June 2016 opposed the sale of Canadian military goods to Saudi Arabia to some degree” (Gutterman and Lane, 2017, p.78). They believe that the government has made the wrong choice in choosing the economy over human rights. This can also damage Canada’s international reputation and its chances for a seat on the United Nations (UN) Security Council. Therefore, Global Affairs Canada has decided to terminate Canada’s arms deal with Saudi Arabia.

A brief history of the arms deal, the context of the issue and the current situation are as follows. Canada’s arms deal with Saudi Arabia recently rose to fame because of human-rights abuses, the war in Yemen and the killing of a Saudi journalist. All of this has strained Canada’s relationship with Saudi Arabia. This arms deal is worth 15 billion dollars and was administrated during Stephen Harper’s government in 2014, it is the largest military export contract in Canadian history. Vucetic (2017) found, “This analysis advances two main claims. One is that Liberal- and Conservative governed Canada’s have rather similar arms exporting records, including goods going to countries accused of human rights abuses” (p.516). This is helpful information for the Canadian foreign policy scholars who emphasize “consensus” over “partisan”. The deal included a 15-year contract with General Dynamics Land Systems (GDLS) to sell light armored vehicles (LAVs) to Saudi Arabia and employing 3,000 Canadians mostly in the region of London Ontario. The combat vehicles will be equipped with machine guns, medium-caliber weapons, powerful barrels capable of firing 105mm shells and anti-tank missiles.

However, in past Canada has sold Saudi Arabia military equipment for defense against possible attacks by Islamic State, this received backlash from the government and human-rights activists. And at that time, the deal was criticized because Saudi Arabia has previously used similar vehicles to the LAVs in attacking protesters located in Bahrain, the eastern province in Saudi Arabia. In addition, Saudi Arabia had made similar reports using the same Canadian made vehicles during their invasion of Yemen. In a sense, Canada went from ignoring Saudi human rights abuses to providing the region weapons to commit the above abuses and ignoring most Canadians who were dissatisfied with the Canadian government’s close ties with Saudi Arabia.

Next to follow is Canada’s position on the Saudi Arabia arms deal, and Canada has already received global attention for its’ feud with Saudi Arabia over human rights abuses. “On Aug. 3, 2018, a diplomatic row erupted between Saudi Arabia and Canada following a human rights-related tweet by Canada’s minister of foreign affairs.” (Khan & Abdullah & Stanbrook, 2018, p.E1030) Prime Minister Justin Trudeau knows it can’t afford to cancel the Saudi arms deal, thousands of jobs will be lost. Minister Freeland has stated that no new export permits will be issued while Canada is “reviewing its arms deal with the Saudis”. But she has not indicated any further action and also hasn’t suspended existing permits. On December 16th, 2018, Prime Minister Trudeau sent a very strong signal on the arms deal telling CTV that the government is looking for a way to end shipments of light-armored vehicles to Saudi Arabia. However, in recent news on March 4th, 2019, Saudi Minister of State for Foreign Affairs Adel Jubeir said that they believe Canada will go ahead with the multibillion-dollar arms deal during a news conference in Riyadh.

On the other hand, Prime Minister Justin Trudeau did mention that he is looking for other ways to stop the deal. Prime Minister Justin Trudeau has stated the following in an interview, “The murder of a journalist is absolutely unacceptable and that’s why Canada from the very beginning had been demanding answers and solutions on that,”. This is also because Saudi Arabia has fallen on its payments for the $15-billion arms deal with Canada. The Saudi government was actually short of around $1.8 billion in payments near the end of September. And this was the payment for the light-armored vehicles in London according to the financial statements from the Canadian Commercial Corporation, as the federal Crown corporation was overseeing the controversial contract. In addition, all of the light-armored military vehicles were built by the Canadian division of American defense giant, General Dynamics.

Prime Minister Justin Trudeau’s thoughts on the Saudi Arabia arms deal is that his priority since Day 1 was thinking about Canadian jobs especially the workers in London. Because he is concerned for the hard-working families in London who rely on these jobs to maintain their lifestyle. Without these jobs provided by the Saudi Arabia arms deal, they are at a great loss, and the Trudeau government will receive backlash from these families. Justin Trudeau has also mentioned that the contract was signed by the previous government. Entailing that there is a confidentiality clause that prevents him from discussing what’s in it, otherwise, consequences for breaking the contract will follow. This why Justin Trudeau calls it a complex situation and he wants to continue to reflect on the “best path forward for Canada and for Canadians”. Therefore, Justin Trudeau’s administration has stated that they won’t be issuing new export permits during the review of the arms deal, and this has been signed by the previous government.

This next section will outline and analyze the policy options that the government of Canada might pursue. In this context, the government of Canada will analyze the benefits and costs of continuing and terminating the Saudi Arabia arms deal. First off are the benefits of keeping the Saudi Arabia arms deal, 44% said the liberals should leave the arms deal in place and ban future arms export for Canada. In London Ontario, 500 production workers at General Dynamics Land Systems became directly employed thanks to the Saudi deal along with hundreds more of spinoff jobs, totaling to an estimate of 3,000 full-time positions. This aided the region after it was hit hard when the Ford plant closed nearby in St. Thomas in 2011 because of the closure of the London Caterpillar plant in the same year.

Another option is to buy and redeploy the vehicles, which can be the best option for the Canadian government. To buy the military vehicles and use them for another purpose, such as peacekeeping operation. Others might point out that Canada already has enough vehicles, but they are actually limited in terms of peacekeeping missions. More vehicles would strengthen our ability to engage in more and longer missions. Another use of the vehicles is to provide transportation for other countries’ troops and equipment. This is similar to the way that the Canadian military deploys some of its aircraft, and this would be extremely helpful to lower incomed countries such as Uruguay and Bangladesh. Another idea is to loan/sell vehicles to countries that are contributing troops to peacekeeping. For instance, in 2005, prime-minister Paul Martin’s Liberal government demonstrated this where they had loaned 100 Grizzly and five Husky armored vehicles to African troops for the peacekeeping operations in Darfur. Hence the vehicles were bought later by Uruguay, who also bought 44 Cougar armored vehicles directly from Canada. The last course of action mentioned by Michael Byers is where the government of Canada purchases the light-armored vehicles from GDLS. These vehicles are already built and there wouldn’t be any job loss because the jobs would remain in place. As stated before, the vehicles can be used for another purpose and other formed forces beside Saudi Arabia.

An international trade lawyer from Cassels Brock and Blackwell’s opinion is to keep the contract and suspend future deals. While it is legally and financially possible for Canada to find a way out of the Saudi Arabia arms deal. The political and economic costs of termination are way too high for the federal government to accept the consequences of it. The termination of the deal would just increase the economic ramification in Southwestern Ontario because people are still worried after the announcement of the closure towards General Motors plant in Oshawa. Therefore, two options the Canadian government could use are imposing sanctions against Saudi officials, as 17 individuals believed to be connected to the slaying of Saudi dissident journal Jamal Khashoggi. And the second option is to just restrict future deals with the Saudi Arabia regime.

However, the cost of accepting Canada’s arms deal with Saudi Arabia is that Canada will be known for placing the economy over human rights. Globally, “Canadian horticultural producers operate in a highly competitive landscape, driven primarily by changes in global trade such as liberation and deregulation. (Preibisch, 2007, p.427). It’s a political saying that Canada will not stand for human rights abuses. For example, when “The Canadian Government has come under fire for poorly handling allegations of human rights violations and environmental harm associated with Canadian mining companies abroad.” (Nixon et al., 2018, p.1742) In addition, Canada’s reputation as an international trade partner would be damaged. “In addition to the violence produced directly by the proliferation of weapons and military equipment, the international arms trade is rife with endemic bribery, corruption, and unethical business practices.” (Gutterman and Lane, 2017, p.84)

Next, are the benefits of terminating the arms deal with Saudi Arabia. Former minister Roland Paris’s suggestion for the Canadian government is to terminate the deal and to move towards this decision quickly. “The report also noted that since “April 2017, a cholera epidemic has swept through Yemen at an unprecedented scale” and that, as of May 2018, 8.4 million people “were on the brink of famine.” (2019, p.164) Because of the recent events, the war in Yemen for example and the Saudi Arabia government ties to the murder of journalist Jamal Khashoggi. “As the conflict in Yemen continues, congressional concern over U.S. support for the Saudi-led coalition fighting in the region has grown.” (2019, p.159). Because of the actions from the United States of America, it is safe for Canada to follow the rule of law and place human rights over the economy. “The Canadian government is now interested in a different catalog: ‘soft power – development, education, human rights, education, and all those important priorities,’…” (Hadfield, 2017, p.28) It is morally unimportant for job losses compared to the types of human rights violations in the Saudi regime.

Lastly, are the costs of terminating the arms deal with Saudi Arabia. If Canada goes forward with the termination, they will have to face a $1 billion fee for the cancellation. “The Liberal budget represents a clear departure from the lean Harper years.” (Ruckert & Labonté, 2016, p. e213) But some might argue that $1 billion is a relatively small price to pay to cleanse Canada’s foreign policy. However, the timing of the termination must be thought-out because of recent news. This is due to the news of the shutting down of General Motors in Oshawa Ontario. The anticipated closure of that facility will leave even more people out of a job, specifically, 2,5000 in the southern Ontario region could be out of work. And this will also likely affect thousands of others working in feeder facilities. And unintentionally this will make the banner year of manufacturing job losses in southern Ontario. Another cost if Ottawa cancels the deal is that the Saudis are not likely to pay the balance owed.

Global Affairs Canada thinks it is best for Canada to terminate the deal under the underlying reason that human rights need to be placed over the economy “Between 1889 and 1939, 37.8% of this core leadership was Canadian.” (Hopkins, 2017, p. E894) because Canada follows the rule of law. “Prime Minister Trudeau’s personable qualities and progressive statements about immigration, gender equality, and climate change have created expectations of elevated Canadian leadership on the world stage.” (Nixon et al., 2018, p.1745). Other countries might see Canada as a country that does not follow the rule of law if they do not prioritize human rights. Gutterman and Lane (2017) study have stated the following:

“As other countries are taking steps to reduce the corruption, violence, and abuse caused by the weapons trade of the global arms trade through the UN Arms Trade Treaty, which Canada has only recently promised to sign, and as other states have begun to refuse arms sales to Saudi Arabia, in particular, Canada is headed in the wrong direction, even as the Trudeau government – rightly or wrongly – seek to re-establish Canada as moral leader on the world stage.” (p.88)

Doing a deal with Saudi Arabia knowing their human rights abuses, Canada should know that the two countries’ values do not align, this is why we call for the termination. Prime Minister Justin Trudeau has stated the following, “We continue to engage diplomatically, but as I’ve said, Canada will always be very clear on standing up for human rights. Foreign Minister Freeland has also stated the following, “We are always going to speak up for human rights, we are always going to speak up for women’s rights and this is not going to change. Because of Canada’s strong ties with human rights, the right thing to do is terminate the arms deal and cut ties with Saudi Arabia for any future deals.

This case is supported by the raging war in Yemen over the past three years that has been largely ignored by the rest of the world, while other countries such as Canada have been fueling the arms sale. Airstrikes have already targeted hospitals, schools, markets and mosques, the evidence of possible war crimes is mounting, as almost 5000 civilians have been killed including hundreds of children. “This narrowing margin signaled growing concern over the Saudi-led coalition’s actions in Yemen and the rising number of civilian casualties.” (2019, p. 161) Therefore, Canada should not be directly or indirectly supplying weapons to Saudi Arabia that would be used in conflict effective immediately.