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‘Punishment’ or procedure? Pessimism lingers over efforts to lift China’s canola ban

As China’s refusal to import Canadian canola seed casts a shadow over the spring planting season for the second year in a row, Parliament’s new special committee on Canada–China relations is hearing different explanations for what’s going on diplomatically.

On Feb. 5, Conservative MP Chris Warkentin asked Dominic Barton, Canada’s new ambassador to China, whether Beijing moved to block Canadian canola imports last March in retaliation for the diplomatic relationship “going sideways.”

“I do think that was a punishment,” Barton testified, joining the ranks of other China-watchers who see canola seed shipments being held hostage as Beijing leverages its massive consumer market to get what it wants.

Officials from Global Affairs Canada did not connect the same dots when they appeared before the committee the week prior.

“There is no clear link between [export] downtrends and the arrest of Meng Wanzhou,” said François Rivest, the executive director for Global Affairs Canada’s greater China division, when asked by Calgary Conservative MP Stephanie Kusie if China was retaliating for Canada’s December 2018 arrest of the Huawei executive wanted for extradition to the U.S.

Nearly a year ago — when China moved to block shipments of canola seed from first one, then two of Canada’s major exporters — Prime Minister Justin Trudeau said Canadian officials would “roll up our sleeves and work with the Chinese officials to demonstrate that canola should continue to flow safely.”

Canada hoped that if it could prove, with evidence, that there are no pests or other contaminants in Canadian shipments, the Chinese would resume purchasing.

Since then, federal and provincial teams have focused on “technical discussions,” including face-to-face talks in Beijing Dec. 18-20, with the promise of more to come in 2020.

Technical discussions can solve technical problems. They got beef and pork shipments flowing again last November, for example.

But on canola, is Canada — as NDP MP Jack Harris asked the GAC officials — “going through the motions here? Or is there a genuine effort to resolve this?”

“We’re very much sticking in our swim lane relative to the technical aspects and the merits of it,” said Fred Gorrell, the assistant deputy minister for international affairs at Agriculture and Agri-Food Canada. “I would leave that for others to decide.”

Engagement’s helpful, but …

“What we saw in [Barton’s] testimony was a clear message that our sector has been targeted for something that has nothing to do with canola,” said Brian Innes, vice president of public affairs for the Canola Council of Canada.

“We are not seeing progress in the technical discussions. It’s good that discussions were had, but I have not heard a reference to a specific development coming from those discussions.”

Canada’s Ambassador to China Dominic Barton was grilled for two hours by MPs on the House of Commons special committee on Canada-China relations last week. (Adrian Wyld/Canadian Press)

When the Chinese wanted to get Canada’s attention, they knew exactly where to hit. Political tension between Ottawa and the Prairie provinces is running high. The plight of the canola sector only makes it worse.

China is the world’s largest importer of oilseeds. Canada (specifically Western Canada) is the world’s largest canola exporter.

The playbook is familiar. The Chinese cited quality issues the last time they blocked canola. Freeing that trade in 2016 took years of political engagement. Then-trade minister Chrystia Freeland took the Chinese a jar of canola seed from her father’s farm to make her point.

“Engagement at multiple levels” is helpful, Innes said.

Now that Canada has an ambassador in Beijing again, canola producers want Barton to keep focusing on market access for agri-food — something Barton told MPs he was “passionate” about.

The thaw apparent in recent comments coming from the Chinese foreign ministry applauding Canada’s response to the coronavirus outbreak could help to unstick other files.

In the meantime, China is feeding its appetite for oilseeds in other ways, and Canada’s exports are down by 70 per cent. That’s a billion-dollar problem for Innes’s sector and the Canadian economy writ large.

With a federal budget on the horizon, what do canola farmers want?

“Our sector doesn’t believe ad hoc bailouts actually help,” Innes said. Producers want the federal government to help them diversify their markets by supporting the biofuels industry at home and hunting for new markets abroad.

‘One foot in front of the other’

Barton’s predecessor, John McCallum, saw his posting end when his comments strayed from the official line. So why could Barton contradict federal officials on canola?

“Sometimes it requires different messages to be given at different levels,” said Meredith Lilly, an associate professor of International Affairs at Carleton University who witnessed China’s commodity diplomacy as a trade adviser in Stephen Harper’s office.

Lilly said she suspects that Barton, as a political appointee, is allowed to speak more freely about the connection between Meng Wanzhou’s case and the plight of Canadian canola growers.

But “since there’s very little else we can do, we should at least do what we can,” she said.

Officials have a duty to canola farmers to “put one foot in front of the other” and carry on with the technical work of debunking myths about the quality of Canada’s crop, Lilly said.

“What else are officials supposed to do? Just pack up and go home and wait?”

An end to Canada’s previous dispute over canola shipments was announced during the 2016 visit of Chinese Premier Li Keqiang (right) to Ottawa. Officials worked for years to refute Chinese allegations that blackleg fungus from Canada’s crop could contaminate Chinese production. (Ryan Remiorz/Canadian Press)

Other countries would notice if Canada let false accusations stand. And the technical evidence Canada collects to support canola shipments should be useful in the case Canada launched against China at the World Trade Organization last September.

The geopolitics may be out of the canola industry’s control, but these WTO cases sometimes unmask political motives disguised as trade barriers and bring about remedies.

It’s a long game, Lilly said. But doing nothing would be “politically difficult to withstand.

“How could a government justify not taking a position based on an accusation this is all around Ms. Meng?”

‘There’s momentum’

Because China joined Canada and 15 other members last month in backing an alternative to the WTO’s now-paralyzed appellate body, there’s a path to sanctioned retaliation should things eventually come to that. The Chinese have complied with past WTO rulings.

Canada’s WTO complaint has led to “constructive discussions,” Barton told the committee. “At the end of the day, results matter. But there’s momentum.”

Results were exactly what Prime Minister Justin Trudeau gave Barton credit for within weeks of him assuming his post, as the Chinese market re-opened to Canadian meat products.

“I had nothing to do with that. The prime minister [was] very nice to say [that],” Barton told MPs.

Re-establishing market access is possible now, he said, because the two sides have resumed formal communications: they argue and debate again, instead of rote “speech reading” back and forth.

Canadian meat imports were “stuck” over a “mistake” in the paperwork, Barton said.

This was not an “arbitrary shift” by Chinese officials because solving the problem was very much in China’s interests, he said. The ongoing swine fever outbreak has devastated China’s domestic herds, making quality pork an expensive commodity for Chinese consumers.

While Barton said he can now see “lots of green shoots” in Canada’s relationship with China, it’s not clear yet that the canola industry can share his optimism.