COLUMN: Accent on Agriculture – What to do about China

Hey there, time traveller!
This article was published 27/03/2021 (2040 days ago), so information in it may no longer be current.

If Canada were a dictatorship, and you were that dictator, what would you do about the trade relationship with China?

Back in the time of Prime Minister John Diefenbaker, China was not much of a participant in world trade. But in the early 1960s, famine threatened China. Canada’s agriculture minister, Alvin Hamilton, negotiated the first ever grain sale contract with China in May of 1961. A total of 233 million bushels of wheat and barley were sold at a price of $312 million. China became this country’s second biggest customer and 60 years later remains one of our most important customers.

But then a couple of years ago, politics stepped in. Canada detained a Chinese businesswoman and began extradition hearings to send her to the United States where she is wanted on fraud charges.

She is the CFO and daughter of the owner of the largest privately held company in China. The company is Huawei, a large telecom company which is spreading throughout the world.

The move by Canada triggered several counter moves by the Chinese, including restrictions on the import of Canadian canola. Other developments included the arrest of two Canadian men on charges of espionage. Some have called on Canada for a strong response, including perhaps escalating trade issues.

But that is not the view of the Canada West Foundation (CWF) which is focused on the issues of the four western provinces. One of the major concerns of the CWF is trade. It wants industry and government to study and concentrate on the two countries common interests, and not their differences. It says agricultural trade is the strongest thread that ties the two countries together.

Canada West uses figures to point out that despite China’s boycott of Canadian canola over the last two years, Canada’s total agricultural exports have been growing at the rate of 15 percent per year. That is well above the 10 percent annual growth rate of our country’s overall trade to China.

In addition to our shared history in grain sales, our two countries also share a belief that food security is a necessity for political stability. China needs reliable suppliers who will be there with the quantity and quality needed. And Canada needs reliable buyers.

If you were that dictator, what would you do about the problems between two large and usually friendly trading countries? Would you be tough, double down and use whatever force you can to correct the problem? Or would you consider that this is the biggest market and work the positives to end the trade problems?