August 30, 2016 / 8:52 AM / a year ago

Canada PM touts agricultural safety amid China canola dispute

BEIJING (Reuters) - Canadian farm goods are high quality and safe, Prime Minister Justin Trudeau said in Beijing on Tuesday as his trade minister said Canada was working hard to resolve a canola import dispute that threatens C$2 billion ($1.5 billion) in business.

Canada's Prime Minister Justin Trudeau attends the China Entrepreneur Club Leaders Forum in Beijing, China, August 30, 2016. REUTERS/Jason Lee

Trudeau is seeking deeper ties with China but a the canola spat, government divisions over China policy and the case of a detained citizen could limit his gains.

China is Canada’s top export market for the oilseed, and Ottawa has taken an increasingly strong line in talks on a new standard, which industry participants say would significantly raise costs for exporters.

China says the standard is necessary to prevent the spread of blackleg disease from Canadian canola into Chinese crops of rapeseed, another name for the agricultural commodity.

Speaking to Chinese entrepreneurs shortly after landing in Beijing, Trudeau said Canada had always had a reputation as a safe, clean and responsible country.

“In our agriculture, we use high-quality products and we create high-quality products and goods,” Trudeau said, without making direct reference to the canola dispute.

Trade Minister Chrystia Freeland told reporters after Trudeau’s speech that Canada had made very clear what a key issue canola is.

“This is a big deal for Canada,” she said. Canola is the country’s second-largest trading product with China.

Canada’s canola farmers are close to harvesting this year’s crop, and Freeland said the government was “working really hard” to keep the China market open and find a resolution.

Chinese officials in Ottawa have said the two countries were having “positive consultations” and the issue could be “resolved properly through joint efforts”.

Under the new standard, China will allow no more than 1 percent of foreign matter per canola shipment, down from a current maximum of 2.5 percent.

There has been no reply to a request for further information or comment to China’s quarantine authority, the agency that formulated the new standard.

Traders have suggested that China’s real reason for a higher standard is that its domestic rapeseed oil stocks are high. Beijing sold 2.8 million tonnes of rapeseed oil from state reserves in the first half of the year, reducing import demand.

Trudeau, who meets Chinese Premier Li Keqiang on Wednesday, has also said he will raise human rights, an issue of great sensitivity in Beijing.

Ottawa is pressing the case of Canadian citizen Kevin Garratt, who was indicted on charges of spying and stealing state secrets earlier this year.

On Tuesday, China’s state-run Xinhua news agency said Canada should not let “groundless concerns” about human rights stand in the way of cooperation.

($1 = C$1.3)

Additional reporting by Dominique Patton; Editing by Nick Macfie

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