Canadian Export Agency Downgrades Its Assessment of Saudi Arabia

(Bloomberg) -- Canada’s export financing agency is raising a red flag on doing business with Saudi Arabia in the wake of a feud between Riyadh and the Trudeau government.

Export Development Canada “is currently off cover on all products in the Kingdom of Saudi Arabia,” the agency said on its website’s Saudi country profile Thursday night. “EDC encourages exporters to exercise caution in shipping to Saudi Arabia.” It said it would continue to monitor the situation and advise customers accordingly.

A diplomatic feud between the two countries erupted last month after a tweet from Canadian Foreign Minister Chrystia Freeland criticized the arrest in Riyadh of Saudi women’s rights activist Samar Badawi. In response, Saudi Arabia lambasted Canada for interfering in its domestic affairs, expelling the Canadian ambassador to Riyadh and ordering a freeze on new investment.

Before the incident, EDC had rated Saudi Arabia as open for business with a low risk of political interference. It has now put that assessment under review. At the time of Freeland’s tweet, EDC had exposure of about C$2 billion ($1.6 billion) to Saudi Arabia, and about 250 customers operating in the kingdom.

Prime Minister Justin Trudeau’s government plans to extend an olive branch to Riyadh, hoping to arrange talks between Freeland and her Saudi counterpart in New York next week during the United Nations General Assembly, according to a Canadian official who spoke to Bloomberg News on condition of anonymity.

To contact the reporter on this story: Stephen Wicary in Ottawa at swicary@bloomberg.net

To contact the editors responsible for this story: Theophilos Argitis at targitis@bloomberg.net, Karen Leigh, Colin Keatinge

©2018 Bloomberg L.P.