Farm commodity groups happy with otherwise unresolved China trade mission

  • National Newswatch

It will take some time to determine what exactly Prime Minister Justin Trudeau gained from his trip to China although it produced smiles from several farm commodity sectors. Trudeau met much of the Chinese leadership but didn't land a commitment to negotiate a free trade deal--just the opportunity to keep talking about one. While Trudeau's office issued comments on the Prime Minister's meetings with the Chinese leaders, the Chinese made no comment on the meetings. Trade watcher Peter Clark said reports on meetings with the Chinese are always one sided because Bejing doesn't issue statements on them. “They're interested in understanding what Canada wants but there won't be any quick approval.” He predicted any trade deal would focus on Canadian resources and using Chinese workers in Canada. Still the Canadian Agri-Food Trade Alliance (CAFTA), the Canadian Meat Council, the Canadian Pork Council, the Canadian Cattlemen's Association and Pulse Canada found benefits in an announced by China of increased market access. CAFTA President Brian Innes said, “We're encouraged that discussions on a free trade agreement with China are continuing.” Exploratory discussions on a potential agreement began in September, 2016, he said. “A better trade relationship with China will help us achieve the government's target of $75 billion in agrifood exports. It's hard to see how we can achieve this goal without eliminating the tariffs and other barriers facing our exports to China.” China is Canada's second largest two-way trading partner after the U.S., and Canadian agrifood exports are among the highest in value at $6 billion annually. “This trade occurs despite tariffs that are nearly double those applied to other goods,” he said. “While China has a strong focus on food self-sufficiency in some areas, it has become a dominant buyer in others and its increasing wealth will grow demand in the future. “Our success in China depends in large part on how well Canada opens doors in this market.” China has already shown its willingness to embrace freer trade in agrifood with other countries. “New Zealand tripled its agri-food exports after concluding an FTA with China in 2008. China also concluded a free trade agreement with the Association of Southeast Asian Nations (ASEAN) that includes Vietnam, Malaysia and Indonesia.” The Meat Council said pork exports could increase by up to $100 million for pork and up to $125 million for beef during the next five years. President Chris White said the new market access “is the result of the hard work of many organizations and stakeholders. The CMC looks forward to expanded trade opportunities with China for the meat sector.” The Pork Council said Canada and China agreed to start a pilot project for the export of Canadian chilled pork to China. “Canada has a particular expertise in exporting chilled pork, especially to Japan, where shares of chilled Canadian pork continues to climb. Canadian pork producers look forward to replicating this success in China where consumers are also demanding safe and nutritious pork. “This announcement cannot come at a more critical time,” said Council Chairman Rick Bergmann. China is Canada's second-biggest volume export market for pork after the United States and Canada's second largest national two-way trade partner. As more than 70 per cent of Canadian pork is exported, access to this vast market opportunity is essential for the industry to grow and contribute to Canada's target of $75 billion in exports by 2025. The Cattlemen's Association welcomed the expanded access for Canadian beef into China, which will allow the importation of Canadian fresh-chilled beef in a pilot project, and establish the documentation to enable bone-in beef trade. Previously Canadian beef exports had been limited to frozen boneless beef, with bone-in access approved in principle last year, subject to establishing the documentation requirements. Cattlemen's Vice-President David Haywood-Farmer said, “There is massive potential for Canadian beef in China, with a Chinese middle class several times larger than the entire Canadian population and growing. If we can someday reach a free trade agreement, our objective would be to eliminate the Chinese tariffs on Canadian beef as well.” Even with the previous limitations and significant Chinese import tariff, annual Canadian beef exports have been growing since access was established in 2012. In 2016, $61 million of Canadian beef was exported to China, and 2017 is on track to reach $100 million. Currently, Canadian beef cuts are subject to a 12 per cent Chinese import tariff. New Zealand beef is already duty-free in China, while Australian beef cuts will be down to 7.2 per cent duty in 2018 reaching zero by 2024. Canadian beef exporters are seeking the opportunity to regain parity with Australia and New Zealand. Pulse Canada said there is major opportunity to expand consumption and utilization of pulses in China to meet government priorities such as the Healthy China 2030 Plan and the National Nutrition Plan 2017-2030. Trudeau's visit to China this week was an opportune time to strengthen China-Canada agrifood business opportunities. Alex Binkley is a freelance journalist and writes for domestic and international publications about agriculture, food and transportation issues. He's also the author of two science fiction novels with more in the works.