Why Canada will go ahead with the LAV deal

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by Thomas Juneau

The Globe and Mail
June 29, 2016

The proposed $15-billion sale of light armoured vehicles (LAVs) to Saudi Arabia has brought significant attention – mostly negative – to Canada’s partnership with the Arabian Peninsula kingdom.

Much of this criticism is valid – the human-rights situation in Saudi Arabia is undeniably abysmal.

But to stop the analysis there and advocate for the cancelling of the deal, as many critics do, is misleading: There is a broader strategic rationale that justifies – as foul as it smells – upholding the LAV deal.

The U.S.-Saudi relationship is built on a fundamental bargain: Riyadh assures the stability of global oil markets in exchange for security guarantees from Washington. The partnership is far from perfect, and frustration has often been high on both sides. But almost non-stop crises – over human rights, the Arab-Israeli conflict, the war in Syria, Iran – have systematically failed to break the seven-decade-old partnership.

Canada has a vital interest in the stability of the global economy; it thus has a major stake in, and it benefits from, the partnership between the United States and Saudi Arabia. As a result, the collapse of order in Saudi Arabia or the emergence of a rival regime instead of the Saud family would seriously hurt Canada. Ottawa has very limited ability to shape this dynamic between Washington and Riyadh, but it has a major interest in its perpetuation.

This is not to deny that the partnership is costly since it associates Canada, if only indirectly, with Saudi Arabia’s appalling human-rights record and its many poor foreign-policy choices. Riyadh fuels sectarianism; it exports Wahhabism (the austere version of Sunni Islam that is the official religion of the state); private individuals and charities in the country have financed terrorist causes for decades by taking advantage of lax terrorism financing controls; it prosecutes a brutal war in Yemen where it has been accused of war crimes; and it is one of the least democratic countries in the world.

Yet critics focus on the costs of these disagreements – which are many – but neglect the benefits of alignment. The partnership with Saudi Arabia is a difficult arrangement, but the alternatives are worse: A collapsed or enemy Saudi Arabia would be damaging to Canada’s interests, and it would not be more democratic. Canada and its allies are better off keeping Saudi Arabia close.

Viewed through this lens, the LAV deal is consistent with Ottawa’s interests in the preservation of the partnership with Riyadh. It also supports Canada’s vital interest in being, and being perceived as, a good ally: The deal represents an important Canadian contribution to the maintenance of the U.S. bargain with Saudi Arabia.

It is also good for Canada’s defence industry, which represents more than 700 companies and more than 63,000 jobs contributing about $6.7-billion annually to gross domestic product. The sale of the LAVs would represent about 3,000 additional jobs for 14 years. The deal also boosts expertise and research and development in the defence industry. By contributing to economies of scale, it will help the Canadian Armed Forces purchase better material at lower prices. And by acting as a business card of sorts, the deal better positions Canada to develop trade with other members of the Gulf Cooperation Council.

Critics have called on Ottawa to suspend the sale of the LAVs to pressure Riyadh to pursue domestic reform. But the Saudi regime is not susceptible to external pressure from a second-tier power such as Canada. The federal government is right to point out that should it cancel the deal, Saudi Arabia would simply buy similar vehicles elsewhere without changing its policies.

The decision then comes down to weighing the moral gain from cancelling the deal against the concrete short-term economic gains, the prospects of gaining longer-term trade opportunities, and the necessity of supporting the flawed but necessary partnership with Saudi Arabia.

In this context, the best way forward is to collectively hold our nose, uphold the agreement, and seize on the opportunity to maximize our current and future trade opportunities with the kingdom.

Thomas Juneau is assistant professor at the University of Ottawa’s Graduate School of Public and International Affairs and a fellow at the Canadian Global Affairs Institute.

Image: Ruskpp via Getty Images

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