Canada FM optimistic on China trade

Canadian Foreign Minister Chrystia Freeland has some first-hand experience about trade with China.

The minister's father grows canola near Peace River, Alberta.

"Canada is a huge canola-processing country. My father had a difficult time selling canola to China," she recalled while speaking to the 2018 Fortune Global Forum in Toronto (Oct 15-17).

Two years ago, China instituted rules such as limiting the amount of dockage (a waste material in grains) in canola shipments to less than 1 percent, to prevent the spread of blackleg (an infectious disease in cattle and sheep). The rules were set to take effect Sept 1, 2016.

Freeland, at the time Canada's international trade minister, brought a jar of canola seeds from her father and showed it to Premier Li Keqiang while she was traveling with Prime Minister Justin Trudeau's delegation to China in August 2016.

"This is personal for us; the great Chinese families use our canola oil in their kitchens; please, let's get rid of the barriers," Freeland said at the time.

"And it worked," she said with a smile, adding that China agreed to maintain Canada's access to the $2.6 billion canola market through 2020.

"Canada's trade with China is growing very fast; our trade with China increased by 23 percent between April and August this year," Freeland said. "It is a good thing.

"The reality is, what is the biggest thing happening in the 21st century? Obviously one of the biggest things happening in the 21st century is the rise of … Asia and particularly China," Freeland continued. "We have to build an open system to invite the rest of the world to join us by playing and discussing the rules. This is a challenge as well as an opportunity."

Another key export for Canada is liquefied natural gas (LNG), which will be helped by a planned facility with a Chinese partner, said Graham Shantz, president of the Canada China Business Council.

The $40 billion LNG export facility will be built in northern British Columbia. The project will be led by Shell, which announced a $3.5 billion investment by PetroChina in the facility. The facility is expected to generate thousands of jobs.

"It's a brand-new export category from Canada to China," Shantz said. "I cannot emphasize enough the importance of this new energy export to China from Canada, when the facility is completed. There's massive potential Chinese demand for Canadian LNG."

China is the world's third-largest importer of LNG and is on pace to surpass the Republic of Korea and Japan as the largest market in the world.

On Oct 17, Beijing welcomed remarks by Trudeau about trade with China, saying it is ready to work together toward the building of a free trade area. Trudeau also told the Fortune forum that China will remain an important place to do business.

Chinese Foreign Ministry spokesman Lu Kang said in a news briefing last week that "both China and Canada are important economies in the Asia-Pacific region. The two countries highly complement each other in their economies and share huge potential and immense prospects in cooperating with each other."

He said China hopes to work with Canada and continue to promote the construction of the China-Canada free trade area in a pragmatic and open manner, deepen cooperation in trade and send the Sino-Canada strategic partnership to new levels.

Trudeau also said his country will continue trade talks with China.

"Certainly, discussions are continuing with China on moving forward on various trade opportunities," Trudeau said in an interview with The Globe and Mail before the forum.

The remarks came days after a telephone conversation between State Councilor and Foreign Minister Wang Yi and Freeland.

Freeland briefed Wang on the signing of the United States-Mexico-Canada Agreement (USMCA) and said that the free trade agreement should be open and inclusive and not exclude any partner, according to a ministry statement.

Freeland told CBC Radio host Chris Hall that the part of the USMCA rules for making pacts with "non-market" economies won't restrict Canada.

"It's the one element of the modernized NAFTA (the former North American Free Trade Agreement) that has not been fully understood by Canadians," she said on Oct 18. "There is nothing new in this clause and in the new agreement that restricts Canadian sovereignty in any way."

Section 32.10 of the USMCA states that a member country must give three months' notice to the other two members before entering a free trade agreement with any "non-market" country, the CBC reported. The USMCA nations would then get to review the text of any such trade deal beforehand and would retain the option to withdraw from the pact.

Freeland said the six-month withdrawal period was also in the original NAFTA deal.

Xinhua contributed to this story.

Contact the writers at renali@chinadailyusa.com.