OTTAWA – After months of discussions between Canadian and Chinese leaders, trade of Canadian canola seed is still halted at Chinese boarders after Chinese health officials claimed they found issues with the seed.
While working to resolve the issue, Canada’s government has also been looking to new markets as a means of mitigating the potential losses caused by China’s decision. The effects on Canada’s economy could be massive considering 2018’s canola seed exports were $2.7-billion to China alone.
Conservative party leader Andrew Scheer demanded during a press conference on April 29 that Prime Minister Justin Trudeau’s government take further steps to protect producers and retaliate against China by revoking millions that have already been allocated to Beijing’s multilateral development bank.
Only two days later Minister of Agriculture and Agri-Food Marie-Claude Bibeau and Minister of International Trade Diversification Jim Carr announced their own strategy moving forward.
The announcement included changes to the Advanced Payments Program for all producers across the county in 2019, increasing the maximum loan allowance from $400,000 to $1-million while providing relief for canola specific producers by increasing the interest free portion from $100,000 to $500,000. Minister Bibeau clarified during the question period that the interest free would only apply to fields with the canola crop.
“These measures will give canola producers the support they need to manage their cashflow and it will give them the flexibility to sell their canola at the best time, at the best price,” said Minister Bibeau.
In addition, the AgriStability program that provides support for producers suffering from annual income declines, sometimes caused by lower values on commodities, will have an extended deadline for applications until July 2.
Minister Bibeau noted in her remarks that trade challenges have more than just an effect on producers’ bottom line. She continued that the improved commitment to mental health in the agriculture industry is only furthered by the recognition that trade uncertainties add to producers’ stress.
“We encourage farmers in need, never to hesitate to reach out for help,” she said.
Canada took their concerns to the World Trade Organization (WTO) during a general council meeting on May 7 and 8. Canadian ambassador and permanent representative to the WTO, Stephen de Boer told the council that Canada insists on working collaboratively with China to resolve the issue.
“Canada wants to be a good trading partner. If a partner identifies a problem with a Canadian export, we take that very seriously and we want to find a solution,” he said. “Canada has been working hard to resolve this issue with China, using every available channel on the ground both in China and in Canada. We have been, and remain, open to working constructively with Chinese counterparts to address their stated concerns. To do so, however, we need to fully understand the problem. The Canadian Food Inspection Agency tested – and then retested – the shipments from the two Canadian establishments suspended by China and found that they met China’s import requirements.”
De Boer continued that despite China’s current reluctance to be forthcoming with information, in the past the two countries have had success when working together. The suspension of Richardson International and Viterra are the only two companies to have been suspended thus far, along with some Canadian pork products. De Boer told the council the prolonged issues are creating uncertainty for “both Canadian exporters and Chinese importers.”
In addition to providing support on the home front, Minister Carr reiterated the government’s commitment to diversifying the canola market around the world.
“It’s critical that Canadian exporters have other readily available markets when faced with trade disruptions. Our country’s continued prosperity and job creation depends on securing markets abroad,” he said.
In recognition of his office’s work over the last three years, Minister Carr noted that in that time “Canadian businesses now have access to more than 1.5 billion new consumers in 50 new markets.” The efforts, he continued, are part of his government’s plan to “make Canada the most well connected trading economy in the world.”
Some of these results have already come to light as Minister Carr mentioned that the Canadian Canola Council has estimated a new agreement with the Asia pacific nations could result in $780-million in new canola exports.
In order to further the cause and diversify Canada’s canola export markets, Minister Carr announced he would be leading a canola trade mission to Japan and South Korea in early June. He added that he intends to promote canola as well as his upcoming meetings in France for the Organisation for Economic Co-operation and Development (OECD) and Chile for meetings with the Asia-Pacific Economic Cooperation (APEC) ministers.
“This outreach will build on our efforts to engage other high potential countries including, the UAE, Thailand, Malaysia, Pakistan, Bangladesh, Mexico, Germany and France,” said Minister Carr.
Before Minister Carr’s mission, Minister Bibeau began discussions with her Japanese counterpart, Minister of Agriculture Takamori Yoshikawa, during the G20 summit, Agriculture Ministers’ Meeting on May 11 to 12 in Niigata, Japan.
Minister Bibeau told press during a teleconference on Mon., May 13 that the pair discussed issues surrounding African swine fever, trade relationships and opportunities under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
“Japan is Canada’s third-largest trading partner for agriculture and agri-food. Under this new agreement [CPTPP] with Asian and Pacific countries, Canadian beef exports to Japan have already doubled in the first two months of 2019 and compared to the same period last year. And Canadian pork exports increased nearly 14 per cent,” she said. “Japan is also a major importer of Canadian canola and Minister Yoshikawa and I discussed the importance of further strengthening our deep-rooted partnership in the canola sector.”
Minister Bibeau was also joined in Japan by Canadian Canola Council chair, Jim Everson, to assist in discussions with Japanese canola importers.
“Together, Jim and I are taking the opportunity to underscore Canada’s commitment of providing canola in a stable and predictable basis to meet the needs of the Japanese market,” she said.
Minister Bibeau later told press she had the opportunity to speak with Chinese agriculture minister, Han Changfu, where she expressed Canada’s concerns with the suspension of Canada’s product and lack of evidence; while also reiterating Canada’s request to send a technical delegation to China.
“Only once provided with evidence will we be able to rectify the situation. Our government continues to stand up for our farmers at home and abroad and continues to work towards a resolution of this matter. We are ready to engage in-person and we hope China will join us,” she said.