August 12, 2016 / 6:02 PM / in a year

Canada, China canola talks end without deal, trade at risk

A canola crop used for making cooking oil sits in full bloom on the Canadian prairies near Fort Macleod, Alberta, July 11, 2011. REUTERS/Todd Korol

WINNIPEG, Manitoba (Reuters) - Talks between Canadian and Chinese officials ended in Beijing without China backing down from plans to toughen its inspection standard for canola, threatening C$2 billion ($1.54 billion) in Canadian exports of the oilseed ahead of a visit by Canada’s prime minister.

Discussions will continue between the two governments, and resolving the issue is a priority for Ottawa, Guy Gallant, spokesman for Canadian Agriculture Minister Lawrence MacAulay, said on Friday.

Canadian Prime Minister Justin Trudeau is expected to visit China before September Group of 20 meetings there. Trudeau, elected last year, pledged to expand trade with China, although relations between the countries have been testy at times.

China’s quarantine authority AQSIQ told Ottawa in February that it would impose a stricter inspection standard for canola shipments starting April 1, over concerns about the crop disease blackleg. It later postponed the move to Sept. 1.

Canada is the world’s biggest exporter of canola, used mainly to produce vegetable oil.

Exporters including Richardson International, Viterra Inc [VILC.UL] and Cargill Ltd [CARGIL.UL] stand to lose sales to Canada’s biggest canola export market, and the dispute may also hurt China’s push for a free trade deal with Canada.

“China and Canada have been seeking to find a solution to this issue through consultations,” said Yang Yundong, spokesman for the Chinese Embassy in Canada, referring other questions to the Canadian government.

Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Jeffrey Hodgson and Sandra Maler

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