Ottawa threatens to snub Beijing over Garratt couple’s arrest

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The Canadian government has threatened to have the prime minister back out of a high-profile meeting with the Chinese leadership if Beijing does not release a couple it accuses of stealing state secrets.

At the same time, the family of the detained couple, Kevin and Julia Garratt, says their detention should be viewed as a trade issue, and is urging the Canadian business community and provincial premiers to join efforts to win their freedom.

But the bid to apply heavy pressure on China is also now raising warnings that Canada could pay an economic price for angering a country that does not look kindly on foreign interference in its affairs.

The stakes are "huge" if Canada picks a fight with China, said Victor Gao, a director at the China National Association of International Studies.

The Garratts are Christian evangelicals from British Columbia who ran a coffee shop in the Chinese city of Dandong on the North Korean border. The couple, who first came to China 30 years ago, were taken away Aug. 4 by agents of China's Ministry of State Security. Authorities say they are suspected of stealing military and defence research secrets. They are believed to be held in a government-run hotel in northeastern China, held in separate rooms under close watch, each with two guards constantly present.

They have not been formally charged or arrested.

The Canadian government has publicly said little about what efforts it is making to intervene on their behalf. But in a series of conversations with Chinese officials, Ottawa has made clear that if the couple is not released, it will decline an invitation to a meeting between Mr. Harper and Chinese leadership in Beijing around the time of the Asia-Pacific Economic Cooperation (APEC) conference in early November, two Canadian officials with direct knowledge of the situation told The Globe and Mail.

Time is critical: If the Garratts are not soon released, plans cannot be made for the pomp and circumstance around that meeting. Canada would still attend APEC, but it would likely be Foreign Affairs Minister John Baird, rather than Mr. Harper, who would chair any sessions with China, one official said.

That threat is designed to strike at what Canada believes is a desire by China to host APEC unmarred by controversy. Chinese authorities place great importance on major global events, and see the APEC meeting as a chance to showcase their country on a global stage, much like the 2008 Olympics.

Officials from both countries had previously acknowledged they were planning a bilateral visit for Prime Minister Stephen Harper tacked on to his travel to China for the APEC summit, which was to include additional touring and a separate meeting with China's president, Xi Jinping. But this week, Mr. Harper's aides refused to acknowledge that plan – saying that while Mr. Harper was going to APEC, "no ‎bilateral trip to China is planned right now, and certainly none has been announced."

The subject of the Garratts has been raised at a number of high-profile meetings, including one in late August between Chinese Assistant Foreign Minister Zheng Zeguang and two people closely connected to Mr. Harper – his chief of staff Ray Novak, and his foreign and defence policy adviser, Christine Hogan.

"They know that it's receiving a lot of attention in Ottawa," said a Canadian official, speaking on condition of anonymity because the Harper government has sought to make its petitions quietly with China.

Last week, Daniel Jean, Canada's deputy minister of foreign affairs, met his counterpart at the Chinese Foreign Ministry in Beijing, and again raised the couple's situation. "We asked for a quick resolution of the case," said the official. "We keep impressing on them that this is important."

But a Canadian snub to China carries risk.

Calling such a threat "amateurish" and "unprofessional," Mr. Gao, a well-connected Chinese academic, said China is keenly aware of how badly Canada needs new markets for its energy as the U.S. rapidly builds up its own supplies – and may be willing to use that as its own leverage.

Anger China and "they may slow down investment in Canada, they may decide not to import energy from Canada in such quantities. These are major decisions which may have consequences for decades to come," he said.

Besides, he warned, there is danger in Canada leaping to the defence of a couple when it does not know the extent of China's evidence against them.

"What if the investigation will reveal lots of evidence? What if they confess?"

The Canadian official said China, too, stands to lose if the Garratts aren't released, pointing to Beijing's interest in an agreement on the return and sharing of seized criminal assets.

Canadian government officials have let it be known they see the couple's detention as a kind of reprisal for the arrest of Su Bin, a Chinese immigrant to Canada accused of masterminding efforts to steal U.S. military secrets.

It is also possible the Garratts, perhaps inadvertently, were caught up in efforts by foreign powers to gather intelligence on North Korea. Their coffee shop, now closed, looks out over a bridge that is the primary artery for goods travelling toward Pyongyang, and Dandong is frequented by spies.

Relatives of the Garratts have nonetheless said they are baffled by the allegations, and are beginning new efforts to marshal support. This week, a Beijing-based lawyer for the family contacted the Canada-China Business Council (CCBC) asking for Canadian commercial interests to take up the cause. His argument is that the Garratts should be seen as small-business owners who have been arbitrarily detained – "a small company trying to make an honest living in a challenging and uncertain regulatory environment," the lawyer, James Zimmerman, said.

"This case is important for all foreign business in China knowing that folks like the Garratts can easily be detained without fundamental due process and access to legal counsel over speculative allegations," added Mr. Zimmerman, Beijing managing partner for Sheppard Mullin Richter & Hampton LLP. An official of the CCBC acknowledged receiving the request, but said he is not yet certain how it will respond. "Strictly speaking, this isn't a business issue," said Y-F Daniel Cheng, the council's Beijing-based managing director. But the possibility of Ottawa abandoning a meeting with Chinese leadership is unlikely to be welcomed by the business community.

"It is a very competitive market," Mr. Cheng said. "It takes everybody from Canada to make Canadian business a success and be competitive."

The Garratt family is also urging Canada's provincial leaders to pay attention. The premiers of Ontario, Quebec, Manitoba and P.E.I. are expected to join a Council of the Federation trip to Beijing Oct. 29; other provinces may also yet join.

Though the provinces have not been told by the federal government that they could be asked to cancel to apply pressure on China, Ottawa "will advise us if there are any issues as we prepare for the October trade mission," said Guy Gallant, spokesman for P.E.I. Premier Robert Ghiz.

Mr. Zimmerman said the premiers would be wise to keep the Garratts in mind.

"Time is of the essence to avoid a situation where the upcoming trade and investment discussions are clouded by the Garratts' ongoing detention," he said.

With a file from Campbell Clark in Ottawa