China shows that you can’t count on China – ever

China blocks Canadian pork and beef and proves itself a bad bet for any future relationships

China has now added Canadian pork and beef to its blockade of Canadian agricultural exports, as it continues to bash away at Canada.

Canadian farmers will be the biggest losers. It hits them directly. Not only does the physical movement of meat get disrupted, but export prices will be discounted as Canadian product looks to find alternative markets by selling itself for cheaper. Commodities like meat have an inherent value and will find buyers, but the way you find buyers when you’re desperate is to cut prices, and that backs up right back to the farm.

This adds to the farm country woe following China’s blockade of Canadian canola, which began in February. China, just a few months ago seeming a gleaming prospect for increased and increasing exports of Canadian farm products (especially in the face of U.S. hostility during the NAFTA renegotiations) now seems like not just a bad bet for exports in the medium term, but an exceedingly bad prospect for any future relationship.

No doubt, when the Meng Wanzhou situation eventually resolves, China’s importers and processors will return to buying some Canadian product. If its government removes the barriers that force them to buy from others, Canadian product will end up in China when its price, quality or reliability makes it the buyers’ best choice compared to other sources. That’s just basic commodity economics.

But it will be a fundamentally different situation. All the optimism about forming links with China, about developing a much more enmeshed two-way relationship, about moving towards some sort of deeper trading relationship that some even described as “free trade,” can now be shelved, probably permanently. After seeing how egregiously China will breach world trading rules, jail Canadians and make trade an explicitly political weapon, only the most foolish Canadian would ever bank upon China being any sort of a reliable trading partner in the future.

As I’ve said in this space before, it’ll most likely be cash-on-the-barrelhead trading with China, with commodities sold when and if they are the most sought after commodities for the Chinese and not as the result of a long, continuing and trusting trading relationship like Canada has with Japan. For most of Canada’s trading history with China, China has been a sporadic market, appearing and disappearing as domestic supply and demand factors pop up or fade.

There’s a great disentanglement going on between the U.S. and China. That’s the biggest story in world news today. Canada’s experiencing its own on a smaller scale. Farmers are on the forefront of this sorry situation, but it’s better to figure this out now than to go a lot further down the entanglement road before discovering that China’s never going to be a “partner” for Canada, even if in the future we’ll pretend to be friends.

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