China says that starting on September 1, it will toughen its inspection standard for canola over concerns about the crop disease blackleg, threatening C$2 billion (£1.2 billion) in Canadian exports of the oilseed.
Prime Minister Justin Trudeau and wife Sophie Gregoire Trudeau visit the Meiji Shrine, escorted by a shinto priest in Tokyo, Japan, on Tuesday, May 24, 2016.
Although merchandise trade between Canada and China totaled $75 billion in 2015, up 20 percent from 2010, that’s only an eighth of the value of total trade between Canada and the U.S. Trudeau’s call for a “more balanced” relationship evokes data that show Canada’s imports from China are worth nearly double that of its exports to the country.
Ahead of Trudeau’s visit, the Chinese government made an attempt to calm those fears.
Gordon Houlden spent 22 years working on Chinese affairs with the Canadian government and now he’s the executive director of the China Institute at the University of Alberta. “You say something publicly and you exercise pressure on the Chinese side and that’s unfair and not a proper way to resolve the issues”.
“I think this is understandable”, Luo said. Trudeau also hosted Wang in Ottawa on the heels of the G-7 summit that riled China, one Trudeau preceded with a state visit to Japan, a regional rival.
The subject of human rights remains sensitve: Wang provoked outrage in Canada after lashing out at a journalist for asking about the country’s human rights record.
“The government is effectively paralyzed over its China policy“, the source said.
Indeed, the Chinese consider the Jean Chretien era of the 1990s as the “golden years” in their business dealings with Canada, he added.
At the time few western countries formally recognized the Asian nation, and Trudeau’s overture served as a breakthrough for China on the world stage.
“The Trade Minister has been very vocal in support and on our position in this, we believe there should be science based regulations and that’s something the government of Canada should stand behind and in fact they are”.
From Canada’s perspective, the stakes of the visit are also very high.
David Mulroney, Canada’s ambassador to China from 2009 to 2012, said Canada now “needs to ensure it will have regular meetings with Chinese officials”.
But as Trudeau tries to create a fresh tone with China, he will have to navigate several ongoing irritants.
Richardson International and Glencore Plc-owned Viterra Inc, Canada’s biggest canola exporters, are recoiling at China’s new standard.
He also plans to raise the issue of jailed Canadian Kevin Garratt, who was arrested in China two years ago for espionage.
Well-placed sources said last month there were divisions inside Ottawa as to how much Canada should open its markets and economy to China.
Balancing such issues is sure to complicate Trudeau’s goal of making inroads.
Before prioritizing China, he suggested Trudeau focus on finalizing Canada’s free-trade deal with Europe and the TPP – a huge, 12-country Pacific Rim treaty that includes the large United States and Japanese economies.
On Friday, ICE Canada’s most-active canola futures dropped slightly.
The sales of the oilseed, which is normally crushed to yield vegetable oil and animal feed, risk undermining Canada’s negotiating position with China, as trading seems to be continuing.