The Owen Sound Sun Times e-edition

China looms large in commodities trading

JIM ALGIE Thought for Food

In the much-disrupted world of international trade in farm commodities, these days much depends on China.

Partly that explains a recent gathering in Ottawa for a conference about how to improve Canadian agricultural exports “in a shifting geopolitical landscape.” Sponsored by the Canadian Agri-food Policy Institute, a largely government-funded think tank based in Ottawa, by the Calgary-based, non-profit Canadian Global Affairs Institute and the Canadian Agri-food Trade Alliance (CAFTA), the conference featured presentations by 27 speakers.

It follows the Canadian government's recent release of its new Indo-pacific Strategy, which outlines the hope and expectation that Canada will continue to expand trade with Pacific nations, including specifically, India, Indonesia and China.

That the focus on China sharpened during the period of that nation's expansion to become the world's second-largest economy seems obvious. That it has softened somewhat, more recently, since the pandemic and combative trade policies under the combative former American president Donald Trump seems also obvious.

Russia's invasion of Ukraine, China's threats toward Taiwan and attendant geo-political complications haven't helped. Certainly, there is evidence in the past year that China has curtailed agricultural imports from the United States, preferring to emphasize expansion of domestic production and imports from South American producers.

However, Ukraine war restrictions have complicated grain supply chains serving the important farming regions of Ukraine, Belarus and Russia and support relatively high prices for international farm commodities, blunting somewhat the impact of recent Chinese food policy adjustments.

In his response to publication of the federal Indo-pacific Strategy in November, president Dan Darling of the Canadian Agrifood Trade Alliance welcomed “a strategy that orchestrates greater engagement and puts agri-food at the heart of Canada's push for deeper trade” in the region. An Ontario beef farmer with many years of service in representative farm groups at the provincial and national level, Darling has long advocated expansion of Canadian agricultural exports.

To groups representing farmers who grow internationally traded commodities and to a variety of Canadian-based processors and food purveyors, it has been an obvious business opportunity that only wants investment and a supportive regulatory environment. Liberal and Conservative governments since Stephen Harper have responded with one free trade agreement after another.

We are among the World Trade Organization's great champions. We have a relatively large land mass with a comparatively small domestic population, a relatively agreeable climate with a prosperous and accomplished farming sector who have, except for those operating within Canada's domestic supply-management systems for poultry and dairy products, an inclination to trade.

Canada's recent statements on Indo-pacific trade recognize potential philosophical challenges of trade with China. Dominic Barton, Canada's former ambassador to China during the contentious period of Chinese confinement for two Canadians, Michael Kovrig and Michael Spavor, was among scheduled speakers at Tuesday's Ottawa conference and will know this as well as anyone.

But Barton, a former managing partner of the controversial consulting firm, Mckinsey, also headed the Canadian government's Advisory Council on Economic Growth when it recommended to former Finance Minister Bill Morneau that he should foster greater investment in agricultural exports, citing growth opportunities in the Pacific and, notably, in China.

In a recent research report for CAPI, former Maple Leaf Foods executive Ted Bilyea argues that world trade in food commodities is linked inextricably with Chinese food demand no matter where China goes to supply the needs of its population.

“Canada has not recognized the leverage it could have as one of the few net exporters of food staples with potential for substantial sustainable intensification of safe food,“Bilyea argues in the paper.

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2023-02-02T08:00:00.0000000Z

2023-02-02T08:00:00.0000000Z

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