Canola Disputes in Canada-China Agricultural Trade: A Chinese Policy Perspective

Abstract

Contrary to the narrative that presents the latest round of trade disputes between Canada and China with respect to canola as Chinese retaliation for Meng Wanzhou’s extradition arrest, a retrospective and systematic review of China’s agricultural policies helps to understand the broader political and economic context behind China’s latest decision to block canola imports from Canada. This is not to say that Ms. Meng’s arrest does not play a role in the latest dispute; however, as this report makes clear, the dispute reflects deeper structural trends in China’s agricultural policy. This means that canola trade between Canada and China is unlikely to resume its previous long-term growth path once the current dispute is resolved. Based on an analysis of trade data, of two previous canola disputes between Canada and China, and of Chinese agricultural policies, this report offers a Chinese policy perspective on the current Canada-China canola dispute. As such, it explores the domestic socio-economic factors and external pressures underlying China’s restrictions on Canadian canola imports in 2009 and 2016. Tracking the evolution of China’s agricultural policy, it is clear that China planned to limit canola imports, due to its concerns of food security and self-sufficiency, long before the unexpected ongoing Canada-China tensions. The analysis indicates that China has not only been adjusting it agricultural structure to enhance its food security but it has also been advancing the “Belt and Road” initiative (BRI) to diversify its imported food supply. This report concludes that the current crisis could have been mitigated if Canadian canola industry had paid closer attention to long-term agricultural policy developments in China. To avoid the same problem repeating itself in the future, it is essential for the Canadian canola industry and governments at the federal and provincial levels to understand what China’s long-term policy goals and actions are.