Canada Challenges China at WTO

It’s just a first step, but last week Chinese and Canadian trade officials met in Geneva, Switzerland, to discuss China’s trade ban on canola seed and other Canadian agricultural products. The meeting was the result of a September letter from Canada to the World Trade Organization, formally challenging China’s canola seed import ban.

In March, China suspended canola seed imports from Canadian exporters, claiming their inspectors had detected pathogens in its canola shipments. But many industry and political analysts believe China is punishing Canada for its detention of Meng Wanzhou of telecommunications firm, Huawei. Under extradition treaty, Canada is facilitating the U.S. in its attempt to extradite Meng, where she will face charges of violating international sanctions on Iran, by the US.  Ms. Meng has been under house arrest in Vancouver since early December.

Peter McKay, Canada’s former Attorney General and past Minister of Justice explains how Canada is facing agricultural and economic trade sanctions from China for an arrest warrant originating in the US…

The United States requests that we extradite Meng. The Chinese, they’re furious that Canada has arrested Ms. Meng, which is a purely legal process. Having received the formal request from the United States, Canada faces economic retaliation from China. We’re between the proverbial rock and the hard place.”

WTO discussions in Geneva are expected to focus on Blackleg, a soil-borne disease that affects canola across North America. China’s official stance is that it does not have Blackleg, so the Chinese will likely argue the ban on Canadian canola seed is to prevent it from coming into China. But until now, China has produced no proof of contaminant in the canola shipments. WTO rules state that Phytosanitary Measures for product exclusion be based on scientific proof, which has been Canada’s argument.

Dwight Gering, president of Canadian exporter DG Global also believes that canola is not the real issue. Gering says the elephant in the room is sitting in house arrest in Vancouver, and that any resolution of this Canadian issue rests, not in Geneva, but in Washington DC.

“It’s hard to see what Canada could offer the Chinese, if we were to say to them, ‘let’s start and launch an open-ended trade negotiation of the kind that you want to do, China.’ But then, we know there’s another guy who’ll get very annoyed, and that’s Donald Trump. Because that’s why he put in the extra language in the USMCA about the kind of agreement we could have with China. The best hope we have is that Trump and China come to an agreement. And as a part of that, they deal with telecoms. Whether Trump drops the extradition request, or drops the charges against Meng Wanzhou, the issue goes away.