Canada will continue to treat China’s restriction on Canadian canola imports as a scientific issue, even though testing shows no basis for the ban and a third Canadian company has been issued a notice of non-compliance.
International Trade Minister Jim Carr told the House of Commons trade committee last week that the Canadian Food Inspection Agency and officials are working to refute China’s claims of pests in shipments and seek other markets for canola.
“I’ve been working the phones,” he said during the April 2 meeting.
But opposition MPs say since repeated testing has not found a problem, the government should be looking at political action.
Most suspect that China’s revocation of first Richardson International’s export licence and then Viterra’s, followed by news that a third un-named company is under scrutiny, is due to Canada’s detention of Huawei executive Meng Wanzhou, following an extradition request from the United States.
Related story: VIDEO: Feds look to replace lost canola sales to China
Carr and Agriculture Minister Marie-Claude Bibeau said they have to complete the scientific investigation with Chinese officials before considering political action such as retaliation.
“We are waiting and we have been waiting for a while now for Chinese officials to show us they have evidence that contradicts ours,” Carr said. “That, according to many with whom we’ve had this conversation … is the right way to proceed on this issue now.”
Representatives from Richardson, Viterra and canola organizations were set to appear at the trade committee this week. Individual producers are to testify at both the trade and agriculture committees.
Last week, the agriculture committee heard the trade barrier is damaging.
“The uncertainty that it presents puts a tremendous chill on the industry,” said Jean-Marc Ruest, senior vice-president of corporate affairs at Richardson.
President and chief executive officer Curt Vossen said the standard approach to dealing with these types of concerns hasn’t been taken.
“The frustration here, of course, is there has been limited followup by those making the concerns known,” he said referring to China.
Vossen said the company learned of the supposed problem from CFIA.
“The fact that we were alerted basically by our own regulatory agencies, with no communication from either the customer or the Chinese regulator, was indeed quite a surprise to us,” he said.
Rick White, CEO of the Canadian Canola Growers Association, said the situation leaves about 4.8 million tonnes of canola seed without a home.
The association said increasing the existing biodiesel mandate from two percent to five percent would help. The fuel market currently takes about 500,000 tonnes but the increase would push that to 1.3 million tonnes.
Canadian Canola Council president Jim Everson asked Ottawa to use everything at its disposal to resolve the problem, including making sure there are enough staff on the ground in Beijing and that the most senior officials are on the recently announced working group.
The group will include federal officials, representatives from the CCC, CCGA, Richardson and Viterra and officials from the Alberta, Manitoba and Saskatchewan governments.
“The group will ensure a co-ordinated and collaborative approach towards resolving this market access issue,” said Bibeau. “The group will also explore alternative markets, both for the short- and long-term.”
She said the government continues to look at business risk management programs and the long-standing request to boost the maximum available under the Advance Payment Program from $400,000 to $800,000, or more.
“Yesterday, in day one of this program, we issued 1,236 advances for $116 million out the door,” White told the April 2 meeting. “This program is on fire and it needs to expand because they are going to hit the lid on it.”
Conservative agriculture critic Luc Berthold asked Fred Gorrell, assistant deputy minister of international affairs for agriculture, if Canada was 100-percent confident in its own quality testing.
“The short answer is yes,” Gorrell said. “The thing is, science is never 100 percent sure. I have strong confidence in what we’re doing and that would be a conversation I would like to have with them face to face.”
He said neither Japan and Mexico, also major canola customers, have raised concerns.
Carr also said the matter highlights the need for a multilateral trade organization that works.
Canada has been pushing for a reformed World Trade Organization. Carr said meetings continue in May in Paris and in June in Japan and momentum is growing.
“We’re not naive,” he said. “We know that if it’s going to work, ultimately the Chinese and the Americans are going to have to support it.”