Regaining Canada’s traditional durum wheat export market to Italy requires a two-pronged approach — diplomacy and legal action through the World Trade Organization (WTO), says Cereals Canada president Cam Dahl.
But Canada’s Agriculture Minister Lawrence MacAulay wouldn’t commit to the latter, when speaking to reporters from Rome Oct. 11, after the high-level Canadian delegation he led met with Italian grain industry officials.
“We’re working hard with the sector, with the bureaucracy, in order to come up with a positive solution, but it is not an easy issue and it will not be solved quickly,” MacAulay said after being asked several times if Canada would take Italy to the WTO for imposing country-of-origin labelling on Italian products containing durum wheat.
“What we’re trying to do, and what we are doing, is taking the approach that the importers and the people involved in the industry want to help us. That’s what we’re doing along with speaking with the commissioner of the EU on agriculture right down to the Italian importers and people involved in the industry. They feel this is the appropriate path to take and that’s the path we are taking at this moment.”
Dahl, who was part of the delegation, but not MacAulay’s news conference, said in an interview later that the meeting went well and the Canadian government is engaged in the issue.
“I think first off it’s really positive that industry and government are able to work together and present a common message and common Canadian voice to the Italian industry,” he said. “I think you see evidence of that today.”
The fact MacAulay was also joined by his deputy, Chris Forbes, and Canada’s ambassador to Italy, Alexandra Bugailiskis, sent a clear signal to the Italians about how seriously Canada takes this trade dispute, Dahl added.
“I hope the diplomatic approach will work because it will be faster, but from our perspective we are still very much asking that the WTO option be explored in case the diplomatic option doesn’t work,” he said.
“There is some background that can be done on that without launching a formal case.”
Canada used to export up to a million tonnes of durum annually to Italy, Dahl said. Exports dropped to 732,000 tonnes in the 2016-17 crop year, followed by an 89 per cent decline to just 387,000 tonnes in 2017-18, Canadian Grain Commission statistics show.
“Recently a few vessels (of Canadian durum) have gone (to Italy), but it’s nowhere near the levels we had seen,” Dahl said.
“We are seeing some move, but not nearly at the levels that we normally expect.”
Italian farmers have been trying to block Canadian durum imports for almost 10 years, Dahl said. But about three years ago country-of-origin labelling was introduced by a protectionist government. That, in combination with inaccurate claims by Italian farmers that Canadian durum is poisoned by glyphosate, led to a drop in Canadian durum imports, he said.
Barilla, a major Italian pasta maker, is one of the companies that stopped importing Canadian durum.
Emilio Ferrari, Barilla’s group supply chain purchasing director, told the Canadian Global Crops Symposium March 28 in Toronto that he knew Canadian durum was safe, but because of public concern over alleged glyphosate contamination, his company opted to import durum from places such as Russia where pre-harvest glyphosate is not applied to durum.
Glyphosate residues on Canadian durum are within allowable limits, Alberta Wheat Commission general manager Tom Steve pointed out to Ferrari.
“I think I object to the term contamination because we have trade agreements and we have maximum residue limits that are part of the international protocol,” Steve said. “I think that the difficulty we’re having with this is that this is not within the trade agreements that we’ve signed in good faith with the European Union. We’re having some difficulty in how we meet your expectations.”
MacAulay told reporters he knows this trade dispute is bad for Canadian durum farmers.
“I raised Canada’s serious concerns about our market conditions in Italy, which are hurting our durum wheat imports,” he said. “I defended our grain farmers. And I urged the Italians to work with us to end the unfair barriers to trade for our durum wheat. Our Canadian durum farmers grow world-class product. It’s high quality and it’s safe and it makes great pasta. We continue to urge the Italian government to acknowledge that our Canadian wheat is safe and high quality. We continue to work side by side with our grain industry so we can reap the benefits of CETA (Comprehensive Economic Trade Agreement).
Back in March, Ferrari called the trade barriers a crisis.
“We need your help to find a solution,” he told Canadian grain industry officials. “I know that this is a problem, but every time you have a problem there is an opportunity.”
Ferrari hinted the solution was for Canadian farmers to stop applying glyphosate to durum pre-harvest.
“I think the Italian pasta producer can pay more for this quality,” he added. “It’s difficult, but I think it is an opportunity.”
Asked how much of a premium pasta makers would pay for glyphosate-free durum, Ferrari said it would depend.