Canadian canola spat shows China has 'ways of hurting' trade partners for political ends

There's no official connection between the canola ban and China's dispute with Canada over the arrest of a Huawei executive. But diplomats and political observers say the ban is part of Beijing's strategy to put pressure on Ottawa.

Last year, Canadian canola shipments to China were worth $2.7 billion

Canada exports almost five million tonnes of canola to China every year. (Todd Korol/Reuters)

In one Beijing supermarket, squeezed between soy sauces and Chinese vinegars, sits Canadian canola oil. It's covered with postcard pictures of the Prairies, stamped with "Calgary" and "Winnipeg" and adorned with little red maple leaves that aren't nearly as welcome as they were a few months ago.

In fact, just around the corner, another grocer who used to have the oil on his shelves is quick to insist there's "nothing Canadian here!"

Last year, Canadian canola shipments to China were worth $2.7 billion. It was a flow that supplied Chinese consumers with oil and farmers with feed. But in the last few weeks, that flow has been choked off, stopped at ports where customs inspectors said they found "dangerous pests" in shipments from Canada.

In this Beijing grocery store, Canadian canola oil sits next to soy sauces and Chinese vinegars. (Saša Petricic/CBC)

As a result, ships loaded with canola sit offshore, as one Canadian company after another has seen licences to import suspended by Beijing for "non-compliance." Manitoba's Richardson International and Saskatchewan-based Viterra, as well as a third, unnamed Canadian company, have all been blocked.

Government spokesmen in Beijing said the problem with one company was "especially severe," and the sudden move was required "to ensure the health and safety of Chinese citizens."

China has offered few details, and no proof of what it calls "scientifically sound and reasonable" findings.

Officially, there is no connection between the canola ban and China's high-profile dispute with Canada over the arrest of Huawei executive Meng Wanzhou in Vancouver last December.

But diplomats and political observers say it's clearly part of Beijing's strategy to put pressure on Ottawa by targeting agriculture, a sector China knows is important to Canada, both economically and politically.

Chinese food security

A hint of that bigger strategy came at the end of a statement by Chinese foreign affairs spokesman Geng Shuang at the end of March, when he suggested that the solution to the standoff over canola is for Canada to "take some concrete measures to correct its previous mistakes" in bilateral relations.

Targeting food imports is a relatively new approach for Beijing, born of a confidence that China's years of struggling to find enough to feed its huge population are over.

Huawei chief financial officer Meng Wanzhou, centre, is out on bail and remains under partial house arrest in Vancouver after she was detained Dec. 1 at the behest of U.S. authorities. (Darryl Dyck/Canadian Press)

"It's not a problem for Chinese people to feed themselves," said Bingchuan Hu, a food supply expert with the Chinese Academy of Social Sciences. Between higher productivity at home (the ability to grow more food for its population) and higher incomes (more money to buy food abroad), Hu said food security hasn't been an issue in China since at least 2004.

"Even if we altogether close or shut down [food] trade, China also can solve this problem," he said.

Indeed, the UN's World Food Programme said China has made "remarkable progress" in alleviating hunger. It met its own target of reducing the number of hungry people at home by half by 2015, and in doing so, China reduced the global hunger rate by two-thirds.

When it comes to any one product — including canola — Hu said China can always find a replacement, either by importing from elsewhere, like Russia or India, or by using other kinds of oil or feed.

"Anything can be replaced," Hu said.

Hu knows food hasn't always been plentiful. China's Great Famine of the early 1960s killed more than 20 million people.

Even now, Hu thanks the Canadian government for sending grain at a time when no other western country would. Prime Minister John Diefenbaker defied a U.S.-led embargo on trade with China, negotiating a system of credit that allowed Beijing to buy several million tonnes of grain at a time when it didn't have any other means to pay.

Canola oil is extracted from the seeds of the canola plant, which is seen in abundance in this field near Cremona, Alta. (Jeff McIntosh/Canadian Press)

But China is a very different place today. And it appears to see itself as powerful enough to use trade issues — even in food products — as a means to achieve political ends.

The Australia example

China seems to be using a similar approach with Australia, with whom it has also had strained relations lately.

Australia has angered Beijing by banning the Chinese company Huawei from its 5G networks on national security grounds. Last month, Australia enacted tough new anti-espionage laws that, among other things, make it a crime to steal industrial secrets on behalf of a foreign government.

It is also drafting legislation to limit foreign political donations, after a heated debate about money from China.

Beijing has not been pleased, accusing Canberra of having a "Cold War mindset" and targeting coal imports, a sector that's critical for economics and politics Down Under. China is Australia's biggest trading partner and its best customer for coal, buying $7 billion Cdn worth annually.

Like Canadian canola, Australian coal has also faced increased scrutiny at Chinese ports: Extra tests, complaints about impurities and other unexplained delays.

New federal Agriculture Minister Marie-Claude Bibeau has had to contend with the trade conflict over Canadian canola. (Mike Symington/CBC)

Mark Beeson, a professor of international relations at the University of Western Australia, said China is throwing its weight around in unexpected ways.

"The message is that we're big and powerful, you depend on us," he said. "If you upset us or do things that are really damaging to our perceived national interest, our core interest, then we've got ways of hurting you."

Beeson said "from China's perspective, there's not a huge amount the likes of Australia and Canada can do."

That's the canola conundrum.

Ottawa has proposed sending a high-level delegation or a panel of experts to China, but Beijing seems in no mood to cooperate right now.

In fact, observers here say the only way to get rid of the canola "pest" problem may be to solve the bigger political one.