Farm groups hope end of Meng Wanzhou case leads to resolution of canola dispute with China

Canadian farm teams are hoping to see a de-escalation of tensions with China that opens the door to resolving a protracted, expensive commerce dispute hanging over the nation’s canola sector.

Greater than two years of bans and restrictions on canola to China are estimated to have price Canada’s business roughly $2 billion via misplaced gross sales and lowered costs.

The dispute boiled up in March 2019 amid rising diplomatic tensions over Huawei government Meng Wanzhou’s detention in Vancouver and the next arrests of Canadians Michael Kovrig and Michael Spavor in China.

Trade insiders hope relationships enhance 

As he welcomed the return of Kovrig and Spavor, the president of the Canola Council of Canada mentioned he hopes resolving a serious subject in Canada-China relations will lead to an atmosphere the place the commerce subject may be settled.

“Our goal as an industry is to have predictable, rules-based trade with China and for all our export companies to be treated similarly in China,” Jim Everson mentioned.

“The announcement last week, I think, really provides hope that there’s a new environment there and that … relationships, if you like, are improving that would allow that kind of discussion to continue to take place.”

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Canola seed exports to China, which have been sitting at $2.8 billion in 2018 earlier than the restrictions, have fallen to $800 million in 2019 and $1.4 billion in 2020, in keeping with the canola council. Oil and meal exports proceed. (Mike Symington/CBC)

China has been Canada’s second-largest marketplace for agricultural exports during the last decade and, in keeping with the Canada West Basis, is the primary or second-largest agricultural export marketplace for every of the prairie provinces.

Canola has been a key a part of that combine.

However China banned shipments from two Canadian corporations, Viterra and Richardson Worldwide, in March 2019. On the identical time, Beijing instituted a extra aggressive regime of inspections, slowing commerce with different Canadian shippers.

Canola seed exports to China, which have been sitting at $2.8 billion in 2018 earlier than the restrictions, have fallen to $800 million in 2019 and $1.4 billion in 2020, in keeping with the canola council.

Canada is looking for to deal with the dispute via the World Commerce Group.

The president of the Canadian Federation of Agriculture mentioned this week she hopes the current developments between Canada and China result in improved relations between the 2 international locations.

“We certainly hope it leads to an environment that’s more conducive to resolving the outstanding canola trade issue and, in general, the Canada-China relations at large,” Mary Robinson mentioned. 

Export market diversification

However Robinson mentioned the state of affairs highlights the necessity for Canada to diversify its export markets as a lot as potential, noting opinions that linked the canola commerce dispute to Meng’s detention.

Mary Robinson, president of the Canadian Federation of Agriculture, hopes to see improved Canada-China relations. (P.E.I. Federation of Agriculture)

“We’ve got to be cautious that similar tactics could be used in the future,” Robinson mentioned. “We’ve got to go into all of these trade agreements with our eyes wide open.”

The canola sector is not the one one to lift considerations about China. 

In the course of the federal election, the Canadian Pork Council referred to as on the subsequent authorities to resolve commerce limitations in China, saying it is used “unscientific, unjustified policies” to limit practically two-thirds of Canadian pork processing capability from accessing the nation.

It has requested for the appointment of an assistant deputy minister devoted to agriculture to Canada’s embassy in China, “to reinforce the importance of the trading relationship.”

Improved relations will take time

Gordon Houlden, director emeritus of the College of Alberta’s China Institute, mentioned whereas there could also be expectations for improved relations between two international locations, he cautioned issues probably will not occur rapidly.

“To say that things won’t recover, I think would be false. And to say that things will snap back like a rubber band and be where we were in November of 2018 is also false,” he mentioned.

“It’s going to take a while for the bruises to heal and people to become less wary.”