China Expands Canadian Canola Ban as Tensions Escalate

A canola crop in full bloom near Fort Macleod, Alberta, in a file photo. On March 26, Viterra Inc. became the second Canadian canola exporter to have its trade registration cancelled by China. Reuters/Todd Korol

TORONTO—The Chinese regime has expanded its restrictions on Canadian canola seed imports to include a second Canadian canola company amid a growing trade and diplomatic dispute between the two countries.

Viterra Inc. had its registration canceled on March 26, less than a month after Beijing revoked the sales permit of another major Canadian canola supplier, Richardson International. In both cases, the regime justified the move by saying they had found “harmful organisms” in the crops.

The ban, effective immediately, was announced on the regime’s General Administration of Customs website. The notice also said Canadian canola products would continue to face increasing scrutiny by the administration through laboratory testing and other methods.

Both Richardson and Viterra have said they regularly test their products to ensure that they meet industry standards.

“We take quality concerns seriously and support a sound, science-based approach in the testing of our exports. Market access issues such as this one hurt our industry and Canadian farmers,” a Viterra spokesperson said.

“We are working closely with the federal government and the Canola Council of Canada to gather more information on the situation.”

On March 21, an industry group said Chinese importers are unwilling to buy any Canadian canola seed. While there was some initial optimism earlier in March that Chinese concerns with the canola trade could be resolved quickly, a solution has not been forthcoming.

“We’re disappointed that differing viewpoints cannot be resolved quickly,” Canola Council of Canada (CCC) president Jim Everson said in a statement. “Under the circumstances, Canadian canola seed exporters who normally ship to China have no alternative but to supply customers in other countries who value high quality Canadian canola.”

The dispute over canola is putting pressure on already tense diplomatic relations between Ottawa and Beijing.

Canada and China have been locked in a political dispute since Canadian authorities arrested telecom giant Huawei’s chief financial officer Meng Wanzhou at the request of U.S. authorities in December 2018. Meng, who is currently out on bail in Vancouver, faces extradition proceedings in Canada.

Huawei chief financial officer Meng Wanzhou arrives at a parole office in Vancouver on Dec. 12, 2018. Meng is facing possible extradition to the United States. The Canadian Press/Darryl Dyck

The United States is looking to extradite the Huawei executive over allegations of fraud. U.S. prosecutors have accuses Meng of playing a direct role in misleading U.S. banks into clearing certain transactions related to alleged Huawei business with Iran, potentially violating sanctions. Meng has been charged with bank fraud, wire fraud, and conspiracy to commit bank and wire fraud. She denies the allegations.

Two Canadian citizens in China, Michael Kovrig and Michael Spavor, were detained by the regime shortly after Meng’s arrest, a move widely seen as an attempt by the regime to put pressure on Ottawa for Meng’s release. On March 4, the day after Canada said it would proceed with extradition proceedings against Meng, the regime accused the two men of working together to steal state secrets. As of March 26, Kovrig and Spavor have each had five visits from Canadian consular officials but reportedly have not had access to lawyers.

Ottawa maintains the detentions are arbitrary and has formally demanded that China release the two Canadians.

Beijing’s restrictions against Canadian canola imports are also seen as an attempt to further pressure Canada. China is the world’s largest canola importer and, according to the CCC, approximately 40 percent of canola and canola product exports from Canada go to China—a market that was worth CA$2.7 billion ($2.02 billion) in 2018. When Richardson had its license revoked, the CCC said at the time that it would negatively impact the industry.

Oilseeds like canola are Canada’s biggest China export category, making up nearly 17 percent of all exports in 2017, according to the Asia Pacific Foundation of Canada. Reuters

Until the recent trade disruptions, Chinese demand for canola was “very strong,” the CCC said. Although the industry group had hoped to resolve concerns about Canadian canola, it said current discussions indicate that an immediate resolution is unlikely.

“Canadian ministers and government officials have responded quickly to Chinese concerns. However, technical discussions are unlikely to lead to an immediate resolution,” said Everson. “We urge the Government of Canada to continue to intensify efforts to resolve the situation.”

Canadian Prime Minister Justin Trudeau told reporters on March 26 that his government is trying to resolve the issue and considering sending a high-level delegation to China to address any safety concerns.

With files from Reuters.