China's ratcheting up on inspections of Canadian pork has 'plausible deniability,' says trade expert

Carlo Dade, the director of the Trade and Investment Centre at the Canada West Foundation, says China's latest move to ramp up inspection of pork from Canada is a stark reminder that trade agreements are only as good as the political situation and the mood for co-operation among parties.

China announced Tuesday it will inspect every package of pork that arrives from Canada. This is on top of a temporary suspension on pork from two plants, including one in Red Deer.

"What we've seen is a series of escalating steps by China to ratchet up pressure on Canada over political concerns," Dade told host David Gray on the Calgary Eyeopener, citing the arrest of Huawei executive Meng Wanzhou and the failure of trade talks.

"We need to be clear, though, that China has done a very good job of establishing evidence and establishing precedent for what they're doing," Dade said. "These aren't just random acts. They have plausible deniability in what they're doing with canola and with pork."

China, locked in a major diplomatic and trade dispute with Ottawa over the arrest of Wanzhou, has already blocked imports of Canadian canola seed and temporarily suspended import permits from two pork plants.

"They warned us three times on canola, they looked at permits for the two other pork operations," Dade said. "So they've been very careful to play by the rules as opposed to the United States., which is just pulling out the blunderbuss and just forgetting about even bothering with trying to establish precedent."

Is all this a failure of our trade dispute mechanisms?

"Technically, yes it would be a failure because the agreements that have worked for so long have not worked, and we find ourselves in the situation," Dade said. "The agreements are only as good as the political situation, and the mood for co-operation. We've been lulled into a  fortunate period of relative trade peace globally, and trade prosperity."

Dade said for Canada to be stuck between China and the U.S. is troubling.

"The U.S., whom we've counted on to defend the international system, the U.S., who created the system, has literally turned on it — and we are stuck in between the two," he said. "So we go from worrying about something that China's done one day to worrying about something the U.S. has done the next. And we really haven't stepped back and looked at the broader trend, that this is intensifying."

Dade says it may be helpful to understand where China is coming from "in terms of its domestic needs for stability, its need to lift the population out of poverty and the need that it has to do whatever it takes to do that."

Different view of global trade

Dade says China has a different view of governance and a different view the current global trade system.

"Yet we assume that China is just going to be another trade partner," he said. "So this realism is understanding the political realities in terms of human rights and other things. And coming to peace at home with what we're willing to do, and what we're willing to sacrifice, the risk that we're willing to take in terms of political and economic, in terms of engaging them."

Meanwhile, for Canadian pork producers, the picture may not be so grim as it looks if they can focus on other markets outside China.

"We have very good markets — Japan is a great market," Dade said. "And we have advantages over the Americans in Japan because of the Trans-Pacific Partnership agreement. So conditions have gotten better for us in our biggest market, which is stable and doesn't have the same reasons to limit their trade that China does."

With files from the Calgary Eyeopener.