D.卡尔顿 罗西
D. Carlton Rossi

Canola




                     

                         Public Safety Minister Ralph Goodale




The absurdity of the Liberal Government's China Policy and Strategy as it pertains to Canola


Some critics have commented on Goodale's mission to Beijing with regard to the canola issue as being absurd. They say the real issue is the arrest of MENG Wanzhou who is an executive of Huawei. It seems the Canadian government understands all of this, too; but, nevertheless, sticks to the point of demanding scientific proof of pests. Goodale goes to Beijing (at the same time as Lighthizer and Mnuchin who are negotiating a complex trade deal of immense proportions with Vice-Premier LIU He). Goodale delivers a speech to the cameras about hammering away on the pest issue. Might he be unaware of who is the hammer and who is the nail? He might even have a dialogue with someone in the Chinese agriculture department about pests in the following vein. "We have no pests." "Yes, you have pests." This might go on as argumentum ad infinitum. He may consult with the ex-ambassador to China whose chosen Chinese name means honourable head of the family who gives wheat. All of these would be examples of the definition of the word "absurd" through exemplification. The absurdity of the Liberal government's China policy and strategy as it pertains to canola is an echo of the past which means a pattern has been established.

It may be said in criticism about the author that he is trying to use reason to understand what is really absurd. There is some degree of truth in that accusation. He is reminded of the character Don Quixote who in his moments of sanity tried to understand his own madness. The errant-knight saw brilliance in the subleties of what appear to most of us as illogical gibberish. For example, he would ponder over the significance of the following sentence. "The reason for the unreason to which my reason is subjected , so weakens my reason that I have reason to complain of your beauty". It is clear that Quixote doesn't quite have all of his mental faculties since he takes the absurd so seriously and therein lies the comedy. It is quite understandable if a critic finds the theme of this essay to be rather absurd and laughable, but perhaps the author is not so sillily insensible as he may seem.

One needs to put the present into perspective by examining the past. On June 28, 2014, SU Bin--who was a permanent resident of Canada--was arrested for cyberespionage against Amercian military contractors with the theft of hundreds of thousands of files. Kevin Garratt who is a Canadian was arrested in China on August 4, 2014 in a tit-for-tat response and later charged with espionage. There was no foundation for the charges against Garratt. One might even call them absurd. Garratt didn't report to CSIS, but rather to God. He was held as a bargaining chip.

The Chinese did not want Canada to extradite SU Bin to the United States according to the Canada-United States Extradition Treaty. However, the extradition did take place. SU Bin admitted his role in the theft, paid a fine and was offered a plea deal with regard to sentence. He was sentenced on July 13, 2016. Garratt was treated in a similar way. He was charged with "suspicion of stealing and spying to obtain state secrets". The operative word there is "suspicion". No real evidence was presented at a closed kangaroo trial. He plead guilty to the charge, paid a fine and then was deported in September 2016.

That happened to be the time that China was offering and Canada was seeking a free-trade deal. To put it another way, Canada wanted free-trade and China wanted an extradition treaty with Canada so that Chinese would not be extradited to the United States, but rather be sent to China. In other words, the Chinese wanted their claim to take precedence over the American claim with respect to extradition in serious espionage cases. Of course, they couched the issue in other terms such as fighting corruption and recovery of illegal proceeds.

The first time that canola came to the forefront was actually in 2016. It was on February 22, 2016 that China's quarantine agency said it wanted to cut dockage. Basically, dockage is anything that is not canola seed as determined by a series of three sieves in the Carter tester. The reduction was to have been from 2.5% to 1% in order to reduce chances of potential blackleg disease. One might link this new change in policy to both the prospects of a free-trade agreement and extradition treaty as well as the charges laid against Garratt on January 28, 2016. These issues became prominent in September 2016 as they were negotiated.

There was an absurdity in the Canadian position regarding dockage reduction. The reason is that many producers had actually reduced dockage to lower transportation costs by rail to the port of export. Dockage was then added at the shipping terminal to meet the 2.5% requirement. It may very well be that the Chinese knew of this circumstance.

While exploratory talks on free-trade and an extradition treaty began in 2016 they did not mature into active talks. Trudeau himself has been blamed because of the approach he has taken. At a four day trip to China around December 04, 2017, he insisted to Premier LI Keqiang that the Chinese listen to his "progressive agenda" which involved protecting women, labour laws and the environment. China's response was to tell Trudeau to take back his garbage.

While Trudeau's approach was seen by the Chinese as arrogant, it might also be interpreted to be absurd. Why was he mixing social issues with trade? The more general question though is "Why does he want free-trade and an extradition treaty with an authoritarian regime which favours SOE's and represses human rights? It is also absurd for Trudeau if he thinks he can get a free-trade deal without an extradition treaty. They go hand-in-hand.

While the finishing touches on a new NAFTA Agreement designated as USMCA were being negotiated it was announced that Article 32.10 had been inserted at the insistence of the United States. This article states that "any one of the three USMCA partners must inform the other two in advance about starting free-trade negotiations with a non-market economy and that the other partners can terminate the USMCA if those negotiations result in a free-trade agreement." Finance Minister Morneau said that this was similar to the existing situation.

Morneau's assessment is not accurate since NAFTA went from a general prohibition to a specific one under USMCA  Article 32.10 which undoubtedly refers to what might be a free-trade agreement between Canada and China which is a non-market economy. A week later, on October 11, 2018, Morneau seemed to mock the clause when he said at the Greater Vancouver Board of Trade “if your largest client is Telus, and you are about to sign a deal with Bell Canada, you might think about that and make sure they are OK with it”.

It was not long before the Liberal government sent four, high-level, negotiators to China in order to discuss canola and other agricultural products. It was announced on November 12, 2019 that the government's aim was to double agricultural exports to China by 2025. However, the door still remained closed due to both tariff and non-tariff barriers imposed by China.

When Trudeau was at the ASEAN summit in Singapore on November 14, 2018 he said that Canada and China will continue to work together towards an “eventual” free trade deal. The Canadian Press also reported that "Trudeau and LI Keqiang met at a key gathering of Asia-Pacific leaders, hoping to push ahead on talks toward a free trade agreement". One can deduce from these statements that both Canada and China were concerned with the non-market economy issue with respect to their sovereignty and were looking with renewed interest in free trade. Both countries returned to the canola agenda.

An important key to opening the Chinese door to a non-tariff barrier of canola was the approval by the Chinese of two seed traits on January 09, 2019; although, one trait has still to pass the test. All three had met Canadian requirements in 2012, but awaited Chinese approval for export. The Canada Canola Council estimates that approval of these traits will allow growers to increase productivity using the same amount of land.

The Chinese approval of canola traits was directly tied to the arrest of MENG Wanzhou on December 1, 2018. This was an incentive (carrot) for Canada to release her. However, the Chinese also brandished a stick by slowing down customs approval as canola arrived at Chinese ports. WSAU News reported that "one Chinese crusher that had a cargo which arrived at the end of December said it took more than 20 days to clear customs, about twice the usual time, as authorities carried out more thorough inspections related to GMOs."

The author was well aware that there was a high probability that China would retaliate for Ms. Meng's arrest with regard to Canada's canola exports. He proposed shortly after her arrest that Ms. Meng be traded for the five Canadians who were already in Chinese custody. He saw it as an issue of morality rather than legality. It was a doable solution because the US justice department had not yet laid formal legal charges. He did not explicitly associate probable retaliation on canola exports because he did not want to link morality with commerce in regard to the arrest of Ms Meng. It seems that this was the exact kind of error that Prime Minister Trudeau made with regard to the SNC-Lavalin affair when he linked legality with commerce and then tried to short-circuit the legal issues through interference in the judicial system.

The author continued to press the issue of a trade of prisoners based on morality as it involved family reunification at the time of the upcoming Spring Festival. The Chinese then added Kovrig and Spavor to the list of hostages and retried Schellenberg. In the first week of January the author warned that there was a high probability that canola sales would be targeted; although, he still did not link it with a moral imperative. On two different occasions, in open letters, he volunteered to meet the Chinese ambassador in Ottawa to discuss a trade of prisoners on the condition that it met the approval of the Canadian government. If he could have facilitated a trade of prisoners it is almost assured that Canada today would be on the road to doubling agricultural exports to China.

One has to go back to the initial premise. There has been an unstated and unspoken association among negotiators on both sides between canola exports and an extradition treaty since late summer 2016 if not from the earlier time when charges were laid against Garratt. It is not surprising then that the Chinese were upset with the possible extradition of Ms Meng to the US which was based on the US-Canada Extradition Treaty. It was almost inevitable from the Chinese point of view that canola exports would be hurt--especially since our Minister of Foreign Affairs has a personal interest in canola. The issue for the Chinese was no longer a hypothetical China-Canada extradition treaty, but the arrest of a top executive of Huawei who might be extradited to the US.

In conclusion, it is said that China-Canada relations are the worst they have been since the recognition of China by Pierre Elliott Trudeau in 1970. The Chinese nicknamed Justin Trudeau "small potato". Only an arrogant Trudeau could take that as a compliment because it is derisive. It is equivalent to the "small Bush" nickname given by the Chinese to George W. Bush. The Trudeau policy of talking exploratory free-trade with China while listening to extradition treaty arguments is absurd. China is not a free-market economy and is an authoritarian political regime. Furthermore, a China-Canada extradition treaty could only undermine the Charter of Rights and Freedoms which was the main achievement of Pierre Elliott Trudeau. Finally, canola was actually genetically modified in the early 1970's by public sector scientists. This period coincided with the first term of the government of Pierre Elliott Trudeau. By 2018, China accounted for 40 percent of Canada's canola seed, oil and meal exports. Today, Canada may stand to lose 2.7 billion dollars per year at the end of the first term of Justin Trudeau's government if China permanently blocks Canadian canola products. Isn't that just about as absurd as it can get?

D.卡尔顿 罗西
D. Carlton Rossi

2019年4月03日



REFERENCES

BLAKE, Andrew, Chinese national gets nearly four years in prison for hacking plot aimed at Boeing, Washington Times, July 14, 2016.

https://www.washingtontimes.com/news/2016/jul/14/su-bin-chinese-businessman-sentenced-over-hacking-/



CANOLA COUNCIL OF CANADA, Canada and China pledged to double agricultural trade by 2025 at the Economic and Financial Strategic Dialogue in Beijing on Nov. 12, co-chaired by Canadian Minister of Finance Bill Morneau and Minister of International Trade Diversification Jim Carr, November 14, 2018.




CHIANG, Chuck, Alarm bells ring over non-market economy clause USMCA’s U.S. veto on future China deals signals realities of global trade fragmentation, Business Vancouver, October 11, 2018.



COLE, Michael J., It starts with canola: How China could weaponize Canada’s federal election, Special to The Globe and Mail, March 28, 2019.

https://www.theglobeandmail.com/opinion/article-it-starts-with-canola-how-china-could-weaponize-canadas-federal/

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/790270/HCSEC_OversightBoardReport-2019.pdf




HANEY, Shawn and INNES, Brian, Canada commits to double agriculture trade to China by 2025 Humboldt RealAgriculture News Team, November 12, 2018.

https://www.realagriculture.com/2018/11/canada-commits-to-double-agriculture-trade-to-china-by-2025/




LAWDER, David, Trade pact clause seen deterring China trade deal with Canada, Mexico, Business News, Reuters, October 2, 2018.

https://www.reuters.com/article/us-trade-nafta-china-idUSKCN1MC305




LJUNGGREN, David, Canada takes tougher line with China over canola ban, demands evidence, Reuters, March 28th, 2019.

https://www.agcanada.com/daily/canada-takes-tougher-line-with-china-over-canola-ban-demands-evidence




NICKEL Rod, PATTON Dominique, GU Hallie, Canadian canola runs into Chinese delays after Huawei arrest, WSAU Wisconsin Morning, February 05, 2019.

https://wsau.com/news/articles/2019/feb/05/canadian-canola-runs-into-chinese-delays-after-huawei-arrest/




PRATT, Shaun, China may delay new canola dockage rules, The Western Producer, March 24, 2016.

https://www.producer.com/2016/03/china-may-delay-new-canola-dockage-rules/




SCHULZE, Elizabeth, Huawei’s equipment poses ‘significant’ security risks, UK says, March 28 2019.

https://www.cnbc.com/2019/03/28/huawei-equipment-poses-significant-security-risks-uk-says.html




THE CANADIAN PRESS, CBC News, China charges Canadian with spying, stealing state secrets, January 28, 2016.

https://www.cbc.ca/news/canada/british-columbia/kevingarratt-china-charged-spying-1.3423931




THE CANADIAN PRESS, CTV News, Trudeau sits down with China's premier at Asian summit over free trade future, November 14, 2018.

https://windsor.ctvnews.ca/trudeau-sits-down-with-China-s-premier-at-asian-summit-over-free-trade-future-1.4176766




TOP CROP MANAGER, China grants regulatory approval of TruFlex canola with Roundup Ready technology, January 09, 2019.

https://www.topcropmanager.com/china-grants-regulatory-approval-of-truflex-canola-with-roundup-ready-technology-21601/




UNGKU, Fathin, Trudeau says Canada to work with China on eventual free trade deal despite NAFTA clause, Reuters, Business News, November 14, 2018.

https://www.reuters.com/article/us-asean-summit-trudeau/trudeau-says-canada-to-work-with-china-on-eventual-free-trade-deal-idUSKCN1NK0CU











                       





The Restriction of Food Imports and Exports


The main issue which Canadian farmers are now concerned with was the restriction on March 1, 2019 of "some" Chinese imports of canola amounting to billions of dollars of lost sales and what to do about spring planting. If it is recalled correctly it was on January 3rd that the author expressed the view that it was probable that canola exports to China would be restricted based on his assessment of the Huawei situation and other considerations. He continued to recommend that the Huawei issue be treated as one of morality rather than legality and the only free-trade was ironically one of prisoners whose families were waiting for them. The PMO with its sunny ways pooh poohed the Winnie the Pooh scenario citing its emphemeral optimism of win-win.

Of course, there is no scientific basis for the Chinese claim that Canadian canola is infested with emphemerae or insect pests lasting transitorily. The Chinese were indicating to Minister Freeland that officials of the PMO and others were regarded as "pests" with their insistence on an absolute interpretation of rule of law. They have linked their ban on imports of canola and the arrests of Kovrig and Spavor with the arrest of MENG Wanzhou.

A parallel situation reared its ugly head in 2016 when canola "dockage" was the excuse and Garratt was accused of espionage. The Chinese were retaliating because of the arrest of Su BIN for his admitted role in a conspiracy of hackers from the PLA's Air Force to illegally access and steal US military information. At that time, the author uniquely interpreted the dockage issue to be the Chinese dissatisfaction with the Canadian view of human rights. In his opinion, the Chinese were saying indirectly that it was impossible to eliminate all human rights abuses in any society as it was to scientifically and completely eliminate dockage. They were also saying that rule of law is what a rule by law government says it is.

The author encountered a situation about 10 years ago which reminded him of the restrictions placed on canola. He had visited Wilfred Laurier University to solicit donations of books which were to be sent to the middle school of Dawu Group. The university agreed to donate used surplus books to the school. In turn, the author would use his import/export contacts and expertise to facilitate the matter and pay for transportation costs.

He acquired wooden shipping crates provided free of charge from a Canadian tobacco company. These bulky crates had been sent to China and then had been returned to Canada from China. They were in excellent shape, looked almost new. and were properly stored. They had been treated chemically so that they would not be infested with insect pests and been imprinted accordingly. However, the Chinese shipper refused to send them as they were. The shipper said with bald face that the containers did not meet the standards for shipment because they had not been chemically treated. It appeared to the author that the company had been instructed not to accept the shipment because it would be sent to Dawu School. It had nothing to do with chemical designation, but rested soley on the particular destination. In other words, the author was regarded as a "pest" for wanting to help Dawu students who now number over 5000.

Before one proceeds one must add a cautionary note. If one is involved in the decision-making process within government then personal issues must be placed aside. One must not let potential conflict of interest or the appearance of it affect one's judgement. Chinese negotiators will take advantage of the situation as they have done in the past. Harden your shell and you will be invincible. Steel yourself and you will be victorious.

The author will not offer any more solutions to problems of dockage or pests which are ultimately politically oriented. It is though a matter of economics. Canada should not put up with this nonsense of arbitrary or non-scientific restrictions regarding agricultural exports. If a country like Saudi Arabia arbitrarily bans imports of wheat and barley from Canada because of Canada's views on human rights then Canada should reciprocate the ban by extending it to 25 years on wheat and barley exports to Saudi Arabia. Give it back to them in spades.

If a country like China--on two separate occasions-- restricts imports of all or some Canadian canola because of Canada's views on human rights and rule of law then Canada should extend the ban, based on economic considerations, to all canola exports over a 25 year period. Why must we constantly be on the defensive? If China doesn't want Canadian canola then it doesn't want Canadian canola. Give it what it wants on Canada's terms of 25 years. If China wishes to switch from canola to soy oil while it has a shortage in vegetable oil supplies of 20 million tonnes then why try to argue with their logic? Let's see how happy their state planning will make 1.2 billion Chinese who have placed an emphasis on food and family by eating mustard seed as far back as the Han Dynasty (206 BC-AD 221).

If governments of these countries wish to regard food (which is ultimately the import of water) in a political context then Canada should respond economically. Canada should not bend, scrape and ultimately make costly concessions to win back these contracts. The Party used food as a politcal weapon against its own people during the period of the Cultural Revolution. Forty million Chinese farmers starved to death. The Party now thinks it can apply this political standard outside China to economically hurt our farmers. No way. This Canadian refuses to be continually blackmailed by illegal exaction.

Climate change is a fact. It is happening right now. In the last summer, smoke from B.C wildfires drifted across Canada. This smoke delayed the maturation process of canola by 10 days in some areas. While our climate is getting warmer; so, too, the unpredicatability of our weather is increasing with extremes being the new norm. It is uncertain how these factors will affect future crops. At the moment, Canada has surpluses of crops which we can export. These surpluses may dwindle as time passes with warmer climate and uncertain weather. Canola seed requires cold weather in a temperate climate to germinate.

Our customers depend on our agricultural exports. They rely on our high quality products. They rely on our guaranteed delivery. They rely on our supplies meeting their demand. They trust us. It is a balanced relationship.

However, Canadians cannot serve our loyal and steadfast customers if a few are playing political games. Every shopkeeper has the right to sell or not to sell product or services to whomever they want. If a shopkeeper is not satisfied with how a customer conducts business then he has the right to say to that customer--don't come back. Our obligation is to those who respect contracts and not to those who break them for political reasons. There is enough uncertainty with regard to climate and weather in terms of the economics of agriculture. We do not also need political uncertainty in the equation.

With respect to China it will be very difficult for Canada to find other customers to replace the loss of "some" substantial sales. It is highly probable that canola farmers will ask for financial compensation from the Canadian government. And they deserve it. Before any compensation is paid, though, a 25 year ban on "all" canola exports to China must be put in place. Since it is the second time we have been extorted then we double down. If you are mistreated once then you are a victim. If you are mistreated twice then you are a fool. If you are mistreated three times then you are mad. We would be fools to resume sales at any time in the next 25 years and jeopardize our reputation with our loyal customers of being a secure export supplier in the agriculture industry. If so, so long--lóng.

With climate change and with weather variability our loyal and reliable customers will appreciate a secure supply of the highest quality food. If there happens to be a food shortage in the next twenty-five years in either the Kingdom of Saudi Arabia which is without enough fresh water or the People's Republic of China which is without enough arable land and potentially fresh water then it will not be our political concern. Those governments will be accountable to their own people who do not have benefit of a vote to remove their governments.



D.卡尔顿 罗西
D. Carlton Rossi

2019年3月20日





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