Canada to restart arms exports after Turkey backs Sweden joining NATO: sources

Canada and Turkey have reached a deal to restart Canadian exports of drone parts in exchange for more transparency on where they are used, and it would take effect after Ankara completes its ratification of Sweden's NATO bid, two sources have told Reuters.

After 20 months of delay, Turkey moved swiftly this week to endorse Sweden's membership in the western military alliance through a parliamentary vote and presidential sign-off, leaving Hungary as the sole ally yet to ratify it.

Turkey is expected to send the final documents to Washington as soon as Friday, which would clear the way for Canada to immediately lift the export controls that it adopted in 2020, the two sources said, requesting anonymity.

The agreement was reached in early January after months of talks, said one person familiar with the process. A second person familiar with the plan said the sides agreed it would take effect after Sweden's ratification is complete.

Turkey's foreign ministry declined to comment.

Canadian Foreign Ministry spokesperson Charlotte MacLeod told Reuters that while the export controls remain in place, Ottawa aims to resolve the issue with Turkey given its status as a NATO ally.

"Canada and Turkey continue to engage in frank exchanges on our bilateral, economic and commercial relations," she said.

Sweden's lengthy bid process frustrated some NATO members due to what they viewed as Turkey's transactional approach, which led to concessions from Stockholm and other allies regarding arms exports and counterterrorism measures.

U.S. leaders have said Turkey's ratification of Sweden's NATO membership clears the way for Ankara's long-sought purchase of U.S. F-16 fighter jets.

Canada suspended drone technology sales to Turkey in 2020 after concluding its optical equipment attached to Turkish-made drones had been used by Azerbaijan while fighting ethnic Armenian forces in Nagorno Karabakh, an enclave Baku has since retaken.

Ottawa halted talks on lifting them in 2022 when Ankara raised objections to both Finland and Sweden's NATO bids. But it re-started talks after a NATO leaders summit in July last year, Reuters reported at the time.

End-user transparency

Under the agreement, Ankara would provide Ottawa with information on the end-users of Canadian-made equipment, especially if it's re-exported to non-NATO members, the sources said.

The "notification process," standard under the international arms trade, covers Wescam sensors used in Turkey's Bayraktar TB2 drones and other dual-use goods and arms-related exports.

The first source said the deal improves transparency and communication between the sides and aims to avoid a repeat of the disagreement in 2021, when Canada said Azerbaijan's use of the camera equipment violated Turkey's end-user assurances.

Ankara has repeatedly criticized export controls as contrary to the spirit of the NATO alliance. In the past, it also faced trade embargoes by France, Germany and Sweden over tensions in the eastern Mediterranean and its operations in northern Syria.

While Ankara has called on Canada to lift the restrictions, it has also said that it will soon be able to produce the drone parts it imports, including optical equipment, on its own. Several countries, including Ukraine, Ethiopia and Pakistan, have bought Turkish drones after their battlefield successes.

On Tuesday, Turkey's Foreign Ministry said it hosted Canada's associate deputy foreign minister, Cindy Termorshuizen, for talks on "regional and international issues," without elaborating.

On Friday, President Tayyip Erdogan said Turkey's ratification of Sweden was welcomed by "Canada, Sweden, and all Western countries," and was viewed as a source of strength within the North Atlantic Treaty Organization (NATO).

Under NATO rules, Turkey must deposit the final document - the instrument of ratification - at the U.S. State Department archives to complete its Sweden ratification.

Canada was the first NATO country to ratify the entry bid Sweden made in 2022 after Russia's full-scale invasion of Ukraine.