China is desperate for our canola, and Canada has more leverage than we think.
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Canola is Canada’s most valuable crop, generating billions in exports each year. Roughly 90 per cent of what we grow is sold abroad, and China has long been one of the top buyers. That’s why Beijing’s decision to impose a 100 per cent tariff on Canadian canola oil and meal and a 75.8 per cent tariff on canola seed in mid-August has hit farmers so hard.
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Canada doesn’t have to give away the farm to secure a canola deal with China.
China’s ambassador to Canada, Wang Di, says the solution is simple: if Canada drops the EV tariff, China will remove its agricultural tariffs. But Canada may not need to go that far.
China cannot easily replace millions of tonnes of high-quality Canadian seed. Imports from India and Australia don’t match the volume or quality, and Chinese futures markets are already showing strain. If farmers can weather the chill, Canada may have more leverage than expected.
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The stakes are high. Canada’s auto sector still supports about 125,000 direct jobs, and losing more ground would further weaken our manufacturing base.
There are risks, however. Canadians can’t ignore China’s human rights abuses, from the treatment of Uyghurs in Xinjiang to the crackdown in Hong Kong. And trading dependence on Washington for reliance on Beijing is hardly a cure-all. Any deal must be negotiated from a position of strength, with safeguards to protect Canadian workers and sovereignty.
Which brings us back to canola. China needs it. We’re willing to sell it. But we don’t have to—nor should we—give away the farm.
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I think the issue isn’t China finding other import partners, but the idea that they could quickly create a domestic industry for canola or comparable oils. Their economic model just allows them to target areas like this and, in a relatively short time, spin up new industries. They aren’t limited by the whims of the market and investors, the state can order these things to be created and subsidize them strongly until the industry can stand on its own. Just look at Chinese cars and tech products. There’s something like 200 Chinese auto brands! I don’t know how many phone and computer manufacturers there are in China, but the CCP specifically targetted both of these industries as points to address while it relied on imports and now their products outclass many foreign options. China is quickly becoming the largest and strongest economy in the world and a lot of that is due to state-directed industry projects focusing on domestic production.
I don’t specifically understand the canola market or industry. Maybe there are some limiting factors that prevent China from producing it domestically that makes this moot, but I just think it’s a risky game to play to assume China cannot produce something domestically in a few years if it becomes economically troublesome to import it.
China has attempted several times to start a canola industry since the Chretien deals and they do not have have the climate nor the agricultural infrastructure to produce canola at scale.
Because of Canada’s fairy unique agricultural history and geography, we’re it. No one else produces canola at our rates by a massive margin.
China can either buy canola from Canada or not at all. Those are the current choices.
I had no idea! Thanks for the info.
We’re talking about agriculture, not some factory making doodads. China does not have millions of acres of idle farmland with the correct climate ready for oilseed production. A command economy can repurpose production in the right places from something to something else, but that is robbing Peter to pay Paul and does not advance food sovereignty.
China also has to worry about discouraging canadian canola farmers into growing something else. If and when they want their oilseed back, they might find it’s simply not there as farmers moved to other compatible crops like pulses etc… It could mean years of shortages and high prices for China.
China has been trying a lot to become self-sufficient, but in some areas they failed. Food is one of them. China is a major food importer, it’s imports exceed by far the exports (often with ration of 20 and 30 to 1).
But even if China would be able to grow canola domestically, it wouldn’t mean too much as Canada must diversify its trade anyway. Just because China isn’t a reliable partner and engages in coercion whenever the government deems it appropriate. Diversifying trade is the only way, not in the least as Canada and other allies can’t ignore human rights, e.g., China’s genocide in Xinjiang and Tibet, its aggression against Taiwan, and so on.