Canada Markets

Trade Tops Canada's Ag Concerns

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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During Canada's Agriculture Summit held in Calgary last week, Jeff Vassart, president of Cargill Canada, told the crowd that "I would put trade at the top of the list for Canada right now, in terms of a barrier to growth and prosperity," as reported by the Calgary Herald.

Two issues rise to the top of these concerns, which includes the recent trade deal signed between the United States and China, which may have the effect of locking out competing suppliers in trade with China. The second is Canada's own troubled relationship with China, with trade in commodities such as canola and soybeans affected, while two Canadians remain imprisoned in that country for more than a year.

This relationship will gain more attention this week with the extradition trial of Huawei's Chief Financial Officer Meng Wanzhou in the British Columbia Supreme Court starting on Jan. 20. In this trial, Canada will find itself walking a fine line between the two global superpowers -- the U.S. that wants to prosecute Meng for bank fraud, and China that wants all charges dropped and Meng returned home a free woman.

Call it a conspiracy theory, but two prominent Canadians have called the entire event as being orchestrated by the U.S. government. Kevin O'Leary stated President Donald Trump planned the event to avoid Canada making trade inroads with China while the U.S. and China were embroiled in a trade war. As well, former Canadian Prime Minister Jean Chretien calls it a "trap that was set to us by Trump."

Regardless, we're in it and it needs to be resolved soon. It's taken over a year to get to today's procedures, while experts have told the media that Canada's slow-moving legal system could result in decision delay that could take years. And, if that isn't bad enough, Canada's Minister of Justice and Attorney General can intervene and overturn an unfavorable outcome.

This case is taken seriously by China. Wenran Jiang, a senior fellow at the Institute of Asian Research at the University of British Columbia told theepochtimes.com that, "This is one of the top priorities for the Chinese government. They've been very mad. They will be watching this very closely."

In addition to this story, Canada continues to dither on a decision to allow Huawei the rights to build Canada's 5G network, while the company has hired high profile lobbyists in Canada and embarked on aggressive advertising to sway opinion. A decision in favor of this system will lead to increased tensions between the U.S. and Canada, while a decision against this technology will heighten tensions between Canada and China.

While there are no easy answers, there is no upside to delaying the process. A court process that takes years is not fair to Meng, not fair to Canada's two prisoners in China -- Michael Kovrig and Micheal Spavor and their families (the Spavor family are acquaintances of this author) -- as well as not fair to the livelihoods affected across the Canadian agriculture industry that have built operations based on trade.

In a perfect world, the justice system would work farmer hours, while viewing the need for results as a producer would view the need to cover acres at harvest time with rain in the five-day forecast.

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Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow him on Twitter @CliffJamieson

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