Ottawa and Beijing are now publicly squabbling over a measure that could effectively halt $2-billion in annual exports of canola to China, with Canadian officials hoping to leverage Prime Minister Justin Trudeau’s visit next week to resolve the trade dispute.
But the Chinese are standing firm, stating that the disagreement over canola is a scientific matter that should not be on the agenda of the official visit that starts next Tuesday.
“We oppose linking a concrete issue of bilateral trade with China-Canada relations,” the Chinese embassy said in a statement to Canadian media.
China is preparing to enact a measure as of Sept. 1 that would limit the amount of extraneous plant material in canola-seed exports – which it blames for the spread of blackleg fungal disease – to less than 1 per cent of each shipment.
A Canadian official told The Globe and Mail on Monday that China has been warned that this is a “major irritant” that will be raised when Mr. Trudeau meets with Chinese Premier Li Keqiang and President Xi Jinping.
On Wednesday, Trade Minister Chrystia Freeland told Reuters that Canada “cannot take the next step in our relationship with China until the canola issue is resolved.”
On Thursday, Ms. Freeland’s office said that “canola is a key aspect of Canada’s bilateral trade relationship with China.” Ms. Freeland plans to continue to raise the matter with Chinese Commerce Minister Gao Hucheng and other Chinese officials.
“This matter is a priority for government officials, and we will continue to work with China and the Canadian canola industry to resolve this matter,” said Alex Lawrence, a spokesman for Ms. Freeland.
The Canadian canola industry is applauding Ottawa’s high-level involvement, hoping for a quick end to the dispute surrounding sales of canola to China.
“I certainly hope that [Mr. Trudeau’s visit] gives added impetus to getting it done,” Patti Miller, president of the Canola Council of Canada, said in an interview.
When they recently presented their position to their Canadian counterparts, Chinese officials insisted they were simply engaged in “science-based” decision-making – a favourite buzzword in Mr. Trudeau’s Liberal Party.
“They were extremely well-briefed,” said a senior Canadian official of the Chinese presentation.
However, Ms. Miller said Canada and China have been engaged in joint scientific studies on canola since 2010, arguing that the findings do not support a ban.
“The research that we have done on this issue, which was done jointly and with independent researchers, shows that there is no reduction in risk from bringing current levels of dockage down to 1 per cent,” she said.
Ms. Miller said in that context, the dispute is not based on science. “Right now, it’s a trade issue.”
The Chinese are a major customer for 43,000 farmers, mainly in Western Canada but also in Ontario and Quebec, who export their product through grain handlers. Last year, China bought more than 40 per cent of all canola that Canada sold abroad.
Canada’s canola industry says the new measure would all but stop shipments to China, where canola seeds are mostly used to make cooking oil and livestock meal. It says it is impractical for Canadian shippers to filter and remove sufficient plant material to meet this new standard.
Over the past half-decade, canola has regularly ranked among the top exports to China from Canada and the industry warns a new Chinese trade barrier would create a ripple effect through Canadian agriculture. It would have adverse impacts for not only farmers but grain handlers operating in Canada.Report Typo/Error