Prime Minister Justin Trudeau says existing rules with China on canola exports have been extended beyond a Sept. 1 deadline as the two countries continue to negotiate a long-term solution.​

The two countries disagree on the level of "dockage" — foreign material such as weeds, other crops and detritus — that should be considered acceptable in Canada's canola exports to China.

The Chinese government had given Canada until Thursday to cut the level of foreign material in its deliveries by more than half.

Trudeau made the announcement about the extension in Beijing, where the canola dispute was expected to dominate the trade agenda during his high-level meetings and the G20, which gets underway later this week.

"We're happy to reassure Canadian farmers that (at) the Sept. 1 deadline we will be able to continue with the current regime of canola and we (will) work together very closely towards a long-term solution in the coming days and weeks ahead," Trudeau said.

Government negotiators in China said Tuesday they were working hard to resolve the dispute involving billions of dollars worth of canola shipments.

International Trade Minister Chrystia Freeland previously said the issue was of "absolute importance" to the Canada-Chinese trade relationship.

"As everyone knows, this was something that was a very difficult issue for our canola growers, for our canola exporters and we were very, very pleased to be able to achieve today, and hear directly from the Chinese premier, that Canadian canola shipments can continue tomorrow, Sept. 1 and onwards, under current terms," Freeland said Wednesday after the extension was announced.

CHINA-CANADA/

Chinese Premier Li Keqiang and Prime Minister Justin Trudeau attend a ceremony at the Great Hall of the People in Beijing on Wednesday. (Thomas Peter/Reuters)

She said the two sides have also agreed to work towards a long-term agreement on rules for Canadian canola shipments. Freeland added that Canada hopes to achieve this in the coming days and weeks.

China's ambassador to Canada, Luo Zhaohui, has stated that Canada has been inflexible and unfair in its approach to talks that began about seven years ago over Chinese concerns about rules for the make-up of canola shipments.

Luo said China buys 87 per cent of its canola from Canada because of its good quality and production. But he warned China can always look elsewhere for the product, if necessary.

Canada to apply to join China-backed bank

Canada will also apply to join the China-backed Asian Infrastructure Investment Bank (AIIB), the bank's president Jin Liqun said on Wednesday, making it the latest ally of the United States to join the new international development bank.

The $100-billion US multilateral institution, seen as a rival to the Western-dominated World Bank and Asian Development Bank, was initially opposed by the United States but attracted many U.S. allies including Britain, Germany, Australia and South Korea as founding members.

"This is really for us, as a new government, the earliest possibility at which we could indicate our interest," Canadian finance minister Bill Morneau said in response to a question asking why Canada was only applying to join the bank now.

Morneau says good time to join AIIB2:54

"We believe the bank is clearly showing that it's going to be a highly effective multilateral institution," he added.

Morneau, who is travelling with Trudeau in China, did not specify how much money Canada would put into the new bank.

"The Canadians' decision to join this bank will greatly strengthen the management of this institution," Jin told reporters. "We can see that the U.S.'s attitude towards AIIB is showing signs of changing, as it's encouraging the World Bank to cooperate more with the AIIB," Jin added.

Canada's application must be in by the end of September 2016. The government then has until the end of the year to ratify a deal and hammer out how much it will invest.

The bank's governors could decide on new members early in 2017, according to Canadian government documents, which also indicated that the size of Canada's share would be decided at that time.

Japan and the United States are the most prominent nations not represented in the bank. 

The United States said in April it is not presently considering an investment in the AIIB.

Feasibility study on free trade

After meeting with Trudeau, Chinese Premier Li Keqiang told reporters through a translator that Canada and China will launch a feasibility study on an eventual free-trade deal.

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Canada's Finance Minister Bill Morneau announced that Canada will apply to be a member of the Asian Infrastructure Investment Bank, which is seen as a rival to the Western-dominated World Bank and Asian Development Bank. (Thomas Peter/Reuters)

A senior Canadian official later said the two counties have ongoing technical discussions on free trade, but stressed that there are no negotiations under way at this point.

"This year marks 45 years of diplomatic relations between Canada and China," Trudeau said as he stood beside Li in Beijing's Great Hall of the People, which overlooks Tiananmen Square.

"My father, Pierre Elliott Trudeau, played an important role in establishing a partnership between our two countries when he was prime minister. So, I'm very happy to be extending that effort now."

The countries also agreed to hold annual meetings between the Chinese premier and the Canadian prime minister on a range of issues, including national security and the rule of law.

Trudeau also said the two sides will take steps to improve trade and investment, boost tourism, expand cultural exchanges and addressing climate change.

Detained Canadian

Li said on Wednesday that a Canadian citizen detained in China for two years on suspicion of spying would be treated humanely, and his case would be handled in accordance with the law.

In January, China indicted Canadian citizen Kevin Garratt on charges of spying and stealing state secrets. He was detained in August 2014 near China's sensitive border with North Korea.

Li did not mention Garrett by name but it is rare for a top Chinese leader to comment publicly on such a highly sensitive subject.

Garratt family

Kevin and Julia Dawn Garratt, shown here flanked by their son Peter and daughter Hannah, were detained in Aug. 2014 near the border with North Korea. They were accused of stealing Chinese military secrets. Julia Garratt was released on bail on Feb. 5, 2015. (Simeon Garratt)

Asked about the Garratt case, Li told a joint news conference with Trudeau that China and Canada would continue to communicate on the matter.

Trudeau said the foundation of a good relationship is the ability to be frank and open about issues that can be worked on together. He said he has "highlighted a number of consular cases" every time he's had the opportunity to sit down with Chinese leaders.

Among those cases, he noted that he always raises the case of Garratt.

Trudeau himself has indicated in the past that there's no evidence to support the accusations against Garratt. The prime minister did not say what China has told him about Garratt's case.

Garratt's family said on Wednesday they were "extremely frustrated and disappointed" with the lack on progress in freeing him.

"Kevin should be released to allow the two countries to move forward to develop stronger ties and cooperation on many levels," the family said in a statement released by their Beijing-based lawyers.

Corrections

  • A previous version of this story said Canada will submit its application to join the Asian Infrastructure Investment Bank by the end of 2016. In fact, it has until the end of September to apply.
    Aug 31, 2016 8:28 AM ET
With files from CBC News, Reuters and The Associated Press