Canada working hard to resolve China canola trade dispute

Government negotiators in China are working hard to resolve a dispute that could affect Canadian canola exports, says Canada's international trade minister.

Chrystia Freeland, part of Prime Minister Justin Trudeau's delegation in China, said she understands the "absolute importance'' of the two countries' trade relationship, which includes billions of dollars worth of canola shipments.

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

Trudeau is in the east Asian country for high-level meetings and the G20, which gets underway later this week, but the canola dispute is expected to dominate the trade agenda. The Chinese government has given Canada until Thursday to cut the level of foreign material in its deliveries by more than half.

"It's a big deal for Canada and the Canadian government understands that,'' said Freeland, who said she knows of what she speaks: she grew up on a canola farm in northern Alberta, where her father is preparing for this year's harvest.

China's ambassador to Canada, Luo Zhaohui, has said 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 added that 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, he said, never showed any kind of flexibility and its position was non-negotiable.

The canola industry has warned the dispute threatens the bottom line of producers as they're ready to take in one of their best-ever harvests.

The issue is heating up with Statistics Canada expecting some bumper grain crops this year, including 17 million tonnes of canola for the third-biggest harvest on record.

The tougher restrictions coming from China, Canada's largest canola buyer, will mean grain traders will have to pass on the higher processing costs to farmers, said Rick White, CEO of the Canadian Canola Growers Association.