Thursday, February 23, 2017

China is juicy export target

The Canadian Agri-Food Trade Alliance has issued a report drawing attention to tremendous export opportunities in China for Canadians.

As the Chinese economy continues to grow, there is increased demand for meat, processed foods, dining out and convenience foods – i.e. a typical Western diet.

Canadian exports to China have steadily increased, even during the economic crisis of 2008, and reached $6.2 billion in 2015.

Canola accounts for half of that, but Canada also sells China soybeans, pulses, pork, wheat, barley, beef genetics, processed foods, malt, seafoods, sugar (mainly as a food ingredient) and hides and skins.

China joined the World Trade Organization in 2001, but has not been very good at adhering to some of its standards, such as those relating to sanitary and phytosanitary standards.

Moreover, Chinese officials tend to relax or tighten import hurdles to match domestic supply and demand, making it difficult to predict when sales orders may soar or slump.

“Exporters from around the world have consistently raised concerns regarding China’s use of non-tariff barriers to manage imports and its failure to comply with international standards and science based decision making,” says the report.

“Canada experienced this when China placed import restrictions on Canadian beef following the discovery of BSE (mad cow’s disease) in Canada and on pork with the discovery of H1N1 (a strain of influenza).

“In both cases, China failed to acknowledge Canada’s internationally-recognized animal health status and to resume trade in a timely manner,” the report says.

“China also maintains a zero-tolerance policy on pathogens, such as salmonella, E-coli, and listeria, and on residues of veterinary drugs, metals, pesticides and other products.

“There is a risk that Canadian meat products may be rejected due to inconsistencies between Canadian and Chinese residue and microbiological standards,” the report says.

“China has also shown inconsistency in the application of sanitary and phytosanitary (SPS) and other measures between domestic and imported goods and across ports of entry.

“Customs administration is considered to be slow and overly onerous in China requiring that importers and exporters secure a host of permits, licenses and certificates.

“There are also concerns that China alters the administration requirements to temper the flow of imports where required. Canada also faces delays in custom clearance.

“As part of its FTA (free trade agreement) with China, New Zealand secured a commitment for 48-hour clearance of imported goods through customs and reports that, while not achieved in all cases, this requirement has improved customs flow.”

Australia also has a free-trade agreement with China.

United States trade analysts predict that if they could negotiate a free-trade agreement, its agricultural exports could increase by $3.9 billion a year. The report says that’s an indication of how important a deal could be for Canada.

However, it also says there are no signs that negotiations will begin any time soon.