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China has lifted its ban on canola from two of Canada’s largest exporters, three years after suspending their licences amid escalating tensions between the countries.

A statement from Global Affairs Canada on Wednesday said that China has advised Canada of its decision to reinstate the licences of the companies. Viterra and Richardson International Ltd. had been facing a ban on exporting to China, the world’s largest canola importer, since March, 2019.

“We welcome this decision to remove the restrictions and immediately reinstate the two companies to allow them to export Canadian canola seeds,” Trade Minister Mary Ng and Agriculture Minister Marie-Claude Bibeau said in the statement. “We will continue to work with Canadian canola farmers, businesses, exporters and their communities to defend their interests and support their success at home and in markets abroad, including China.”

China’s ban had been treated as a full-blown crisis in Canada. Canola is the number one cash crop for many farmers across the Prairies. In the years leading up to the 2019 decision, China imported $2.8-billion worth of Canadian canola annually – amounting to about 40 per cent of Canada’s exports of the crop.

The licence suspensions took place against the backdrop of heightening tensions between Beijing and Ottawa. In late 2018, China denounced Canada for its move to arrest and authorize extradition proceedings against Huawei chief financial officer Meng Wanzhou. That was quickly followed by China’s arrest of two Canadians, Michael Kovrig and Michael Spavor, who were accused of espionage-related offences. The three were eventually released last September.

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China cited quality concerns as reason behind its initial canola decision – claiming its inspectors had found pests in samples. Still, the move was widely seen as retaliation for Canada’s actions on Ms. Meng.

In 2019, shortly after China’s announcement, Richardson vice-president of corporate affairs, Jean-Marc Ruest, called the move an “attack” on Canadian agriculture and farmers.

On Wednesday, Jim Everson, president of the Canola Council of Canada, said he was pleased with China’s reversal.

“This is a positive step forward, restoring full trade in canola with China and ensuring that all Canadian exporters are treated equally by the Chinese administration,” he said.

“We will continue efforts to nurture and maintain a predictable, rules-based trade environment.”

The Canola Council of Canada estimates China’s licence suspensions cost the industry between $1.5-billion and $2.3-billion between March, 2019 and August, 2020. Canola-seed exports to China were $800-million in 2019 and $1.4-billion in 2020. Last year, Canada sold $1.8-billion worth of canola to China.

In late 2019, Canada took the case to the World Trade Organization (WTO), requesting a panel to assist in resolving the dispute. In its submission to the WTO at the time, China said “the measures were imposed to the extent necessary to protect human, animal or plant life or health and in a transparent and non-discriminatory manner.”

The WTO established a dispute resolution panel in 2021.

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