China is an important export customer for Canadian agricultural products, but can it be trusted?
After the arbitrary arrest in December 2018 of two Canadians, Michael Spavor and Michael Kovrig, many Canadians would answer no.
China using non-tariff trade barriers to cut back on Canadian canola seed, soybean and pork imports in 2019-20, added to the distrust.
Moreover, China is a dictatorship where human rights are ignored and there is no rule of law.
But the Canada West Foundation’s report, Re-engagement Strategies for China on Agricultural Issues, makes the case for not giving up on trading with China.
A traditional trade agreement might not be appropriate, but Canada would benefit if it had a deal like the Phase 1 deal the United States has with China, the report says.
While according to published reports China will not meet purchases set out in the deal this year, China agreed to “structural changes” reining in non-tariff trade barriers, Carlo Dade, one of the report’s authors, told reporters Nov. 2.
“China has agreed, according to the USTR (U.S. Trade Representative), 54 of 57 changes that it had to make in the rules of trade,” he said.
It gives the U.S. a competitive advantage in China, the report says.
“This may not be the correct solution,” Dade said. “This may not even turn out to be the best solution, but we need more folks out there producing more stuff like this. If this isn’t the right idea then tell us what is.”
The report notes that China has better rate of compliance over World Trade Organization disputes than the U.S.
“Almost immediately after the new NAFTA agreement came into effect, Canada was faced with a renewal of national security tariffs on its aluminum exports to the U.S.,” the report says. “Despite this, there have not been calls for Canada to walk away from the new NAFTA agreement.”