A complaint to the World Trade Organization about China’s refusal to allow imports of Canadian canola is a prudent step that would address the political necessity of showing strength on the issue.
It might also force Chinese officials to justify their actions.
As things stand, the intransigence of China during this dispute leaves Prime Minister Justin Trudeau looking like he is beating his head against the Great Wall.
China has blocked Canadian canola from entering the country since early this year, ostensibly due to pests discovered in seed shipments. The Canadian Food Inspection Agency has tested these shipments and rejects China’s assertions. China’s actions are thought to be in retaliation for the arrest of Huawei executive Meng Wanzhou in December for extradition at the request of the United States.
Ominously, China has also recently rejected pork shipments from Canada, citing labelling issues.
There is thinking that a WTO complaint would not work because the administration of U.S. President Donald Trump is blocking the appointment of judges to the organization’s appellate body, citing unfairness in decisions. Two judges are retiring in December, after which the body will be inoperable.
But Canada is leading the efforts to reform WTO rules, so the U.S. may be open to lifting its embargo on the appointment of judges, especially if current talks with China strike a trade deal.
China could ignore a WTO ruling, but that would also be a stronger global signal that it is not a reliable trading partner.
The importance of a WTO complaint is that there would be the looming prospect of China having to present a case based on science, something that is not happening now. Canadian officials are pursuing that strategy, but Chinese officials won’t even accept a CFIA-led delegation.
The Canola Council of Canada, which has maintained a commendably level-headed approach during this dispute, says a WTO complaint would be “well-founded.”
The Canola Working Group, whose membership includes government and industry officials, does not want to make its strategy public, and that’s fine. It means Canada is keeping a WTO challenge in its hip pocket for use if necessary. And Agriculture Minister Marie-Claude Bibeau has not ruled out a complaint, arguing it is not yet the right time.
Since there seems to no interest from China in presenting scientific data directly to Canada, a complaint would oblige the Chinese to argue its case before the WTO tribunal.
As well, a WTO appeal would help quell some of the shrill calls for retaliatory action coming those who claim Canada is doing nothing, which is palpably untrue. A retaliatory trade dispute with China would be futile due to the relative size of the two economies.
Canada has levelled retaliatory tariffs against the U.S. for the Trump administration’s tariffs on Canadian aluminum and steel, but Canada can target key states in the U.S. where the government is vulnerable. No such tactics can be employed in China, since President Xi Jinping is not vulnerable.
International Trade Diversification Minister Jim Carr said on May 3 that Canada must play “chess, not checkers” in addressing the trade dispute. But chess at the competitive level is played with clocks, and if one side doesn’t move, time runs out and the game is lost.
As well, you are destined to lose if you don’t launch a counterattack. China has made two moves in a row — lifting import licences on canola and now delaying pork imports from Canada through labelling complaints.
Canada is sitting at the board, thinking. The clock is running. A WTO complaint would be a timely move.
Karen Briere, Bruce Dyck, Barb Glen, Brian MacLeod and Michael Raine collaborate in the writing of Western Producer editorials.