Nova Scotia

Trade pact will slow Canadian lobster sales to China, says expert

Even though a new U.S.-China trade agreement does not eliminate heavy Chinese tariffs, the deal will still result in a loss of Canadian seafood sales to China, according to an expert.

'We're going to pay a price in terms of our seafood market access to the Chinese market'

In this photo from last August, a lobster is held by a dealer in Kennebunkport, Maine. America's lobster exports to China plummeted when retaliatory tariffs shifted business to Canada. (Robert F. Bukaty/The Associated Press)

Even though a new U.S.-China trade agreement does not eliminate heavy Chinese tariffs, the deal will result in a loss of Canadian seafood sales to China, according to international trade researcher Mohammad Rahaman of Saint Mary's University in Halifax.

Canadian live lobster exports to China, mostly from Nova Scotia, soared after China slapped retaliatory tariffs of 35 per cent on U.S. lobsters.

U.S. lobster exports tanked while Canadian sales jumped by 123 per cent, worth a record $384 million, during the 10 months of 2019.

The new trade deal does not lower those tariffs. But China has pledged to buy $32 billion worth of American agricultural products over the next two years, including lobster and other seafood products.

China's "pseudo-capitalism"

Rahaman says the Chinese government has the clout to compel its companies to switch back to lobster from the United States.

He calls it "pseudo-capitalism."

"They have private corporations who are heavily indebted to state-owned banks and, through that channel, China can actually direct trade and commerce," he said.

"I understand there is a lot of skepticism on whether they will actually follow through on the promises they have made. But if they really want to do it they can deliver on this promise."

Rahaman added: "We're going to pay a price in terms of our seafood market access to the Chinese market."

'We can sell everything we catch'

Keith Colwell, Nova Scotia's minister of fisheries and aquaculture, said the province has nothing to fear. "Basically, it won't make any difference for us."

"We can sell everything we can catch. We sell top-quality products. We send it on time and their customers are very happy with it."

Global Affairs Canada said it continues to monitor the China-U.S. deal.

The amount of seafood China will buy from American fishermen, even at inflated prices, has not been spelled out.

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