Trade with China

This page contains latest information about the market disruption with China, one of our biggest customers.

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Current situation

Since market access issues affecting canola seed trade started in early March 2019, the licenses of two companies, Richardson and Viterra, to export canola seed to China remain suspended. Other exporters are seeing some purchases of canola seed, with exports down between 50 and 70 per cent compared to pre-blockage levels. Seed exports to China have fallen from $2.8 billion in 2018 before the restrictions, to $800 million in 2019 and $1.4 billion in 2020. Expert analysis estimates this has cost the industry between $1.54 and $2.35 billion from lost sales and lower prices between March 2019 and August 2020. Oil and meal exports continue. For more details, see the March 4 CCC news release and latest canola export stats.

The CCC has urged the Government of Canada to take all necessary actions to restore rules-based predictable trade with China and ensure all Canadian exporters are treated equally by the Chinese administration. The Government of Canada brought this issue to the WTO, initially raising it at the WTO General Council meeting on May 7, 2019, followed by bilateral consultations between Canada and China on October 28, 2019 in Geneva. The canola industry was hopeful that this dialogue would lead to the re-establishment of full, predictable trade so that further steps of WTO dispute resolution would not be necessary. However, without progress in these discussions, the Government of Canada has moved on to the next stage, requesting a dispute settlement panel be established at the WTO. This panel was established at the Dispute Settlement Body (DSB) meeting on July 26, 2021. For more information, read the statement from Global Affairs Canada.


Frequently asked questions

What is the latest update on the Government of Canada’s actions at the WTO?

The Government of Canada brought this issue to the WTO, initially raising it at the WTO General Council meeting on May 7, 2019, followed by bilateral consultations between Canada and China on October 28, 2019 in Geneva. The canola industry was hopeful that this dialogue would lead to the re-establishment of full, predictable trade so that further steps of WTO dispute resolution would not be necessary. However, without progress in these discussions, the Government of Canada has moved on to the next stage, requesting a dispute settlement panel be established at the WTO. China blocked this request at the WTO Dispute Settlement Body (DSB) meeting on June 28, 2021, however the panel was established at the second DSB meeting on July 26, 2021. Read more about the stages in a typical WTO dispute on the WTO website. For more information, read the statement from Global Affairs Canada.

What is the background on the Government of Canada’s engagement with the WTO on this issue?

Discussions between the governments of Canada and China at the WTO in Geneva on October 28, 2019 were the result of the Government of Canada’s formal request for consultations under the WTO’s Sanitary and Phytosanitary (SPS) agreement on September 6, 2019. The agreement obliges all measures restricting trade to be based on science. Read the Government of Canada statement and CCC release.

In the spring of 2019, Canada initially raised concerns about China’s treatment of Canadian canola at the WTO, pressing China to show evidence of their quality concerns. At the WTO General Council meeting on May 7, 2019, the Canadian ambassador told WTO members, including China, that, “Canada has repeatedly asked China for the scientific evidence that supports its findings and the measures taken – but China has not been forthcoming in providing this information.” During his remarks the ambassador highlighted how an “open and predictable rules-based international trade is the only way global commerce can succeed.” After noting that Canada has tested the shipments in question twice and found they comply with Chinese requirements, Canada asked China to “engage in solution finding” as Canada has done using every available channel. Read the Canadian ambassador’s full statement.

What is the current situation affecting canola seed exports to China?

Since market access issues affecting canola seed trade started in early March 2019, the licenses of two companies, Richardson and Viterra, to export canola seed to China remain suspended. Other exporters are seeing some purchases of canola seed, with exports down between 50 and 70 per cent compared to pre-blockage levels. Seed exports to China have fallen from $2.8 billion in 2018 before the restrictions, to $800 million in 2019 and $1.4 billion in 2020. Expert analysis estimates this has cost the industry between $1.54 and $2.35 billion from lost sales and lower prices between March 2019 and August 2020. Oil and meal exports continue. For more details, see the March 4 CCC news release and latest canola export stats.

Does this affect canola oil and meal exports?

Canola oil and meal are not subject to the same challenges as seed. Oil exports continue to occur and are being monitored closely. Canola meal shipments remain unaffected.

What are the license suspensions based on?

China has indicated they have a quality concern with Canadian canola seed related to specified quarantine pests that include weed seeds and plant diseases. These are identified in the public notices of non-compliance issued to Richardson and Viterra by China’s customs agency. The Canadian Food Inspection disagrees with the assessment of China’s customs agency.

Technical discussions about these pests of concern have not indicated that an immediate resolution is possible. We are confident in the quality of Canadian canola. Our canola consistently meets the requirements of countries around the world.

What does this mean for new contracts and deliveries?

Limited seed sales to China impacts the demand for and value of canola. Canola seed exporters are supplying customers in other countries. Growers are encouraged to contact their local grain buyer to discuss marketing options.

Should growers cut back on growing canola?

Growers, as always, need to make their own choices, and consider many factors when making seeding decisions. We believe the fundamentals of trade with China are strong – we have an industry strategy to ensure a sustainable and growing supply of high-quality canola in Canada, and growing demand in China for high quality oil and protein. We have a challenging situation in China at this time but believe the basis for trade in canola between the two countries remains solid.

What relief is being provided to canola growers who are feeling financial pressure?

In 2019, the Government of Canada implemented new regulations to increase loan limits under the Advance Payments Program (APP). Growers can contact their APP provider for more details, and find more information from the Canadian Canola Growers Association.

How is the Canola Council responding?

The Canola Council, which includes growers, continues to work closely with the Government of Canada to find science-based solutions and resume stable trade. The Canola Council believes more action is necessary to diversify canola markets, including enhancing market access in Asia and diversifying markets in Canada by increasing the amount of canola used in biofuel. We will continue our efforts to focus attention in Ottawa on resolving this issue.

What opportunity does biofuel offer for Canadian canola?

Using more canola and vegetable oil in Canada for biofuel represents an important diversification opportunity, one that is entirely within the control of Canadian governments. Going from the current two per cent renewable content in diesel to five per cent would be a domestic market for 1.3 million tonnes of canola, while at the same time helping Canada significantly reduce greenhouse gas emissions. Internationally, the EU biofuel market is another important opportunity for Canadian canola. The Canola Council is providing growers with information around the opportunities for export to the EU market and gaining certification at www.canolacouncil.org/growing-canola/eu-certification/.

What are the next steps that the Canola Council is recommending?

As we focus attention in Ottawa on resolving this issue as soon as possible, the Canola Council believes that more action is necessary to restore access to the Chinese market, engage alternative markets and support canola producers dealing with significant market uncertainty. This includes advancing the following:

  1. Diversify markets
    • Domestically – More canola-based biofuel through the federal Clean Fuel Regulations could create a new domestic market equivalent or greater than the size of our Japanese export market, reduce exposure to unpredictable markets and help Canada significantly reduce greenhouse gas emissions.
    • Internationally – Efforts to expand exports of seed, oil and meal to new and existing customers by supporting industry needs such as bolstering capacity in Asia to resolve barriers to trade and develop markets.
  2. Support producers through this unprecedented uncertainty
    • On June 3, 2019 the Government of Canada implemented new regulations to increase loan limits under the Advance Payments Program (APP). Work is ongoing to monitor market conditions closely, so that if action is needed in the future it is timely and effective. This includes asking for flexibility to adjust the current suite of business risk management programs, should they be needed.
    • The Canadian Canola Growers Association is leading producer support efforts, more information can be found on their blog.

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