China’s Canadian canola seed boycott demonstrates Canada is too dependent on one country.
That’s why Trade Diversification Minister Jim Carr, along with Canada’s canola industry, is kicking off a canola trade mission in Japan and South Korea in June.
“We will be working closely with the sector to identify other opportunities for trade missions in Asia as well,” Carr told reporters in Ottawa May 1. “I will of course promote canola in all of my upcoming visits, including in France for a meeting of the OECD and Chile for a meeting of APAC ministers.”
Other potential markets include the UAE, Thailand, Malaysia, Pakistan, Bangladesh, Mexico, and Germany, he said.
Last year China accounted for 40 per cent of Canada’s canola seed exports worth $2.7 billion.
Japan is already a major canola seed customer averaging 2.22 million tonnes of imports the last five years.
Canaola Council of Canada president Jim Everson said Carr is starting in Japan because he’s attending a G20 trade ministers’ meeting there.
“It is a very valuable market for canola and a very established market and they tend to be a customer for canola so we do think it’s valuable to reach out,” Everson said in an interview May 2.
South Korea is not a major Canadian canola seed customer, but is a major importer of Canadian canola oil. In 2018 it imported 119,100 tonnes of oil third behind the United States and China at 1.7 million and 1.2 million tonnes, respectively.
In addition, the working group of government and industry officials, set up to restore canola seed exports to China and find other markets, is discussing establishing a trade office in Asia.
“The idea is there’s growth in the market in Asia… partly because of the trade agreements that have been signed there,” Everson said.
Canada has in recent years signed a deal with South Korea and ratified the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership).
Everson noted sanitary and phytosanitary issues as trade irritants weren’t new, nor limited just to China and canola.
“The issues we’re running into are… not only here but in other markets we’re in like the durum issue in Italy,” he said.
Everson said the concept of an Asia office would put people on the ground in Asia who were experts in that area who know the market access issue very well and can represent our industry and the Government of Canada in the marketplace.
“It would be complementary with the embassy work and with the trade commissioners, but really focused on those complex market access issues,” he said.
During an online update of the canola-China trade dispute Everson said in markets where import tariffs have been removed sanitary and phytosanitary rules are sometimes used to restrict imports. The rules are intended to protect importers against foreign pests that could harm local production, but are sometimes misused.
“They are much more complex because they deal with these issues of science, different interpretations of methodologies of testing and sampling… and require a lot of effort to resolve,” Everson said. “When it comes to the future of agricultural trade it seems to us that we’re going to need to have a greater capacity of people who can deal with these market access issues — those plant scientists and technical people, as well as diplomatic and market access experts.”
Meanwhile, Canada is leading efforts to reform and preserve the World Trade Organization (WTO), which adjudicates trade disputes, Carr said.
“But ultimately this is not going to succeed unless the Americans and Chinese come on side,” he said.
The Americans have refused to appoint appellant court judges to the WTO and if they don’t by the end of December the dispute settlement mechanism of the WTO will be severely eroded, Carr said.
“There are threats to the world trading order,” Carr said. “There are countries that don’t particularly want to play by a rules-based system. We differ. We’re making the arguments and we’re aligning in a coalition as best we can and I would say that I am moderately optimistic that we’re making good headway.”