China has reopened its market to imports of Canadian pork and beef after a four-month ban in a move that signals a partial thaw in trade relations and will significantly help Canadian farmers.
China had banned shipments in late June, with Chinese authorities at the time citing falsified export certificates as the reason for this measure. But Prime Minister Justin Trudeau said Tuesday the Chinese market has reopened, a development that will enable exports worth hundreds of millions of dollars to resume shipping.
Canadian farmers and the agrifood industry saw their sales to China severely damaged in the wake of Canada’s arrest of Huawei Technologies Co., Ltd. chief financial officer Meng Wanzhou at the Vancouver International Airport in December, 2018. This included not only an end to shipments of pork and beef, but also a drastic reduction in the amount of canola seed and soybean purchased by Chinese buyers.
China, the world’s largest pork producer, has had its pig herd reduced by millions amid an outbreak of African swine fever, a fatal disease that is widespread in Asia and parts of Eastern Europe.
A senior Canadian government official who was familiar with the matter said the Chinese needed access to Canada’s pork supply in particular after the outbreak, and that the Chinese did not want to be overly reliant on U.S. pork in the meantime. Beijing was also eager to reduce the number of battles it was fighting on various fronts with trading partners, the source said. The source is being kept confidential because they were not authorized to speak publicly.
Mr. Trudeau credited Dominic Barton for the rescinding of the ban. Mr. Barton was appointed ambassador to China in September, filling a post that had been left vacant for more than eight months as relations worsened.
The appointment of Mr. Barton, and China’s subsequent posting of a new ambassador to Canada, the source said, helped ease discussions.
The source said Canada provided what it felt was a solid plan for resuming trade that China could offer as a reason for reopening the market.
The Canadian Food Inspection Agency presented a detailed plan to Chinese customs officials detailing steps the regulator would take to ensure no further export-certificate fraud occurs, according to producers.
Producers said they have been told the Canadian Food Inspection Agency would be prepared to sign export certificates as early as this week for pork and beef shipments destined for China.
Former Canadian ambassador to China Guy Saint-Jacques said he doesn’t believe the appointment of new ambassadors made a difference. He said Canadian pork producers told him earlier this week they had received a query from China asking how much pork they could provide in the next three months.
“They may have lost 40 per cent of their pigs. The farmers are reluctant to buy new pigs as they are not sure whether they will lose them again. This means it’s 15 to 20 million tonnes of pork that have disappeared,” Mr. Saint-Jacques said.
He said while the ban removal is a good development for Canada-China relations, he cautioned that things will remain unstable as long as Ms. Meng is detained here. Canada was acting on an extradition request from the United States when it seized Ms. Meng. She will face an extradition hearing in early 2020.
The Chinese also locked up two Canadians shortly after Ms. Meng’s arrest – former diplomat Michael Kovrig and entrepreneur Michael Spavor, in what was widely seen as retaliation.
Beijing has repeatedly said the key to repairing relations is returning Ms. Meng. Mr. Saint-Jacques said the next potential source of China-Canada friction will be whether Ottawa sides with the U.S., Australia and other allies in barring China’s Huawei from this country’s 5G networks.
“We have to brace ourselves that we could have years of turbulence in the relationship with China,” the former envoy said.
The Chinese embassy in Canada was not able to offer immediate comment.
Canada’s 7,000 pork producers were already coping with turmoil in agricultural markets from the trade war between the U.S. and China when the ban hit. The Washington-Beijing conflict had diverted U.S. pork into Canadian and European markets, and the ban only worsened things for producers in Canada.
Pork producers sold more than $500-million of product to China in 2018 and had expected to record more than $1-billion in sales in 2019 before the ban.
China has turned to global sellers to replace its pork supplies after the outbreak, purchasing 43 per cent more from the U.S., Brazil and other sellers, according to Chinese data, and driving up global prices. But the loss of the Chinese market has meant Canadian pig farmers have missed some of the boost from higher prices.
“It’s been difficult,” said Gary Stordy, director of government and corporate affairs at the Canadian Pork Council, which represents Canadian hog farmers. Mr. Stordy said the loss of the Chinese market has deprived Canadian producers of a market for pig parts – hooves and offal – that they could not find elsewhere. “It affects the economic stability of the entire industry.”
The Canadian Meat Council, which represents 55 federally inspected meat packers and processors, thanked the government, noting that before the ban, China had been the second-largest export market for Canadian pork and the fifth largest for beef.
“Our long-standing trade relationship with China is very important to both sides and this represents an important step for both countries,” president Chris White said.
There are no signs the impasse affecting Canadian canola shipments is set to be lifted.
Heidi Dancho, a spokeswoman for the Canola Council of Canada, said seed exports remain blocked. “We hope today’s good news for the livestock industry helps create momentum to restore access for what used to be Canada’s most valuable export to China − canola.”
China began limiting the import of the oil seed in March by suspending the licences of two big Canadian traders, Viterra and Richardson International. The Chinese government blamed quality problems that Ottawa said were unsubstantiated.
China is a major market for the crop, buying 40 per cent of Canadian canola seed, oil and meal. In 2018, China bought $2.7-billion worth of Canadian canola seed.
With a report from Robert Fife