Canada’s canola farmers hope WTO complaint against China can ease costly blocks on seed exports
- China suspended imports of canola seeds from two firms in March 2019, while also making shipments from other Canadian firms subject to enhanced inspections
- Canada has now lodged a complaint and asked the Dispute Settlement Body at the World Trade Organization (WTO) to establish a panel
Canola farmers in Canada hope the escalation of a complaint over restrictions placed on its seed exports to China, which have been in effect for over two years, can help resolve the issue that is estimated to have already cost the industry up to US$1.9 billion.
“The Canola Council of Canada supports the government of Canada’s action to take the next step in the WTO process and request a dispute-settlement panel be established at the WTO,” said a statement from the Canola Council of Canada.
“The canola industry had hoped that the bilateral consultations between Canada and China would lead to a resolution, restoring full trade in canola seed and ensuring all Canadian exporters are treated equally by the Chinese administration.
“In the absence of progress, this is the next step to resolve the dispute and preserve rules-based, predictable trade with China.”
Neither Richardson International or Viterra responded to requests for comment.
According to the Canola Council of Canada, exports from other Canadian firms are down between 50 and 70 per cent compared with levels seen before both the ban and the enhanced inspections were put into place.
The industry body claims that the value of Canada’s canola seed exports to China fell from US$2.27 billion in 2018 to US$650 million in 2019 and US$1.13 billion in 2020.
Exports of canola oil and meal have continued, but an expert analysis by LeftField Commodity Research in February estimated that the disruptions had cost the industry between US$1.25 billion and US$1.9 billion, due to lost sales and lower prices.
“Canada is proceeding with the next step of the World Trade Organization (WTO) dispute-settlement process to restore full market access for Canada’s canola seed exports to China,” said a statement from Global Affairs Canada, the government department that manages Canada’s diplomatic and consular relations, encourages international trade, and leads international development and humanitarian assistance.
“Canada, standing shoulder to shoulder with its farmers and workers, will take the necessary steps to ensure they have the support they need to succeed in international markets.
“Canada is confident that its canola seed exports meet China’s import requirements and is committed to regaining full market access for canola seed exports to China.
“Canada is seeking a solution that reinforces open, rules-based trade and respects international rights and obligations.”
According to the Canola Council of Canada, Canada exported 11.8 million tonnes of canola seeds to all overseas markets in 2020, with China the largest export market with 2.6 million tonnes, just ahead of the European Union and Japan.
So far this year, the data taken from Statistics Canada and the Canadian International Merchandise Trade Database shows that Canada had exported 3.4 million tonnes of canola seeds up to the end of April, with about 900,000 tonnes shipped to China.
A meeting between business representatives and selected WTO members this week flagged the restoration of an effective dispute-settlement system as a key issue to be addressed at the 12th Ministerial Conference, which will take place from November 30 to December 3 in Geneva.
Ngozi Okonjo-Iweala becomes first African, first woman director general of WTO
“They clearly stated that business needs an effective WTO, and its reform is critical to ensuring that the organisation remains relevant.”
The meeting was attended by the likes of the Canadian Chamber of Commerce; the Australian Chamber of Commerce and Industry; and the United States Council for International Business, as well as Deloitte, FedEx, Google, Pfizer, UPS and Walmart.