August 7, 2018 / 6:34 PM / 12 days ago

Canada to ask allies to help cool Saudi dispute as kingdom blocks its grain

OTTAWA, Aug 7 (Reuters) - Canada plans to seek help from United Arab Emirates and Britain to defuse an escalating diplomatic dispute with Saudi Arabia, sources said on Tuesday, as traders revealed the Arab state would no longer buy Canadian wheat and barley.

The Saudi government on Sunday recalled its ambassador to Ottawa, barred Canada’s ambassador to Riyadh and placed a ban on new trade, denouncing Canada for urging the release of rights activists. Riyadh accused Ottawa on Tuesday of interfering in its internal affairs.

One well placed source said the Liberal government of Prime Minister Justin Trudeau - which stresses the importance of human rights - planned to reach out to the United Arab Emirates.

“The key is to work with allies and friends in the region to cool things down, which can happen quickly,” said one source, who declined to be identified because of the sensitivity of the situation.

Another source said Canada would also seek help from Britain. The British government on Tuesday urged Canada and Saudi Arabia to show restraint.

The office of Foreign Minister Chrystia Freeland did not respond to requests for comment.

European traders said on Tuesday that Saudi Arabia’s main wheat-buying agency has told grains exporters it will no longer accept Canadian-origin wheat and barley.

The dispute looks set to damage what is a modest bilateral trade relationship worth nearly $4 billion a year. Canadian exports to Saudi Arabia totaled about $1.12 billion in 2017, or 0.2 percent of the total value of Canadian exports. Much of that was tanks, armored personnel carriers and motor vehicles.

Saudi Arabia has ordered roughly 15,000 Saudis studying in Canada to leave.

The first source said Canada shared the view of foreign policy experts who believe the Saudi reaction reflected internal strains inside the kingdom, where 32-year-old Crown Prince Mohammed bin Salman is trying to push through domestic reforms.

The source said Canada had no regrets about speaking out on human rights in Saudi Arabia.

“What we did was in line with other countries, with what we do for families of Canadians and in line with what we have done in the past,” said the source.

The previous Conservative government also had challenges with Riyadh over human rights.

Garry Keller, who was chief of staff to ex-Conservative Foreign Minister John Baird, said the government needed to look at how it could help businesses that might be affected.

“The United Arab Emirates are going to want to maintain relationships with Canada ... They are the best interlocutor for Canada in the region,” he said. (Reporting by David Ljunggren; Editing by Cynthia Osterman)

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