Canola dispute looms over Canadian PM's visit to China

A long-standing dispute involvingCanadian canola exports to China threatens to overshadow Prime Minister Justin Trudeau'stripto the economic superpower that begins next week.

Canada says it wants the canola issue settled before relations between the two countries can move forward,while China has accused Ottawa of inflexibility and says it may look to other suppliers.

At stake is a significant customer for Canadian farmers. Canada currentlyships about four million tonnes of canola seed about 40 per cent of the country's canola seed exports to China. That represents a market wortharound $2 billion to Canada.

• Trudeau to visit China starting Aug. 30

The 6-yearspat centres on a disease known as blackleg that can affect canola, and the amount of dockage the stems, pods, weeds and other plants that winds up in shipments.

The current maximum dockage rate of foreign materials is2.5 per cent, butChina, which is worried about the spread of blackleg to its domestic rapeseedcrops,is insisting that the rate must be cut to one per cent, and has given Canada a Sept.1 deadline to make that change.

'Signficant slowdowns'

That deadline comes duringTrudeau's China visit, which is slated forAug. 30 to Sept. 6, and includes stopsin Beijing, Shanghai, Hong Kong andHangzhoufor the G20 leaders' summit.

A representative of Canada's canola industry said if the dockage rate is lowered, the country's big producers would have to look for other markets for their product.

"Taking the dockage down to one per cent would mean a lot of additional cleaning, and it would cause significant slowdowns in a system that's really built to move bulk commodities to port and to customers very quickly," saidPatti Miller, thepresident of theCanolaCouncil of Canada,ina recentinterview on CBC's The Exchange.

"You could see some shipments go, you could see some smaller companies meet that demand, but the bulk of our exports would need to remain under current standards," she said.

Canada is insisting that the 2.5 per cent dockage rate is backed up by science and that the risk of transmission of blackleg to China'scrop is low,but China isn't accepting that, Millersaid.

Earlier this week, International TradeMinisterChrystiaFreelandtold theThomson Reuters news agency:

"We cannot take the next step in ourrelationship with China until thecanolaissue is resolved."

A spokesman forFreelandhas said thecanolaissueis a priority for Canadian government officials

In an interview with The Canadian Press, China's ambassador to Canada, Luo Zhaohui,said Ottawa has lacked flexibility in its negotiations.

"Beijing thinks this is unfair," said Luo.

"Even so, I'm still quite optimistic and I wish, through joint efforts by both sides, we can resolve these issues," the ambassador added.

Luo said China gets about 87 per cent of its canola from Canada, but he warned it could look to others sources if required.

As canola is Canada's biggest cash crop, denial of entry into the Chinese marketwould affect farm incomes here, Miller warned.