Carney set to meet Xi Jinping, while canola producers and automakers hold their breath

BEIJING — As Prime Minister Mark Carney meets President Xi Jinping Friday in Beijing, few industries will be watching as intently as Canada’s canola producers and electric vehicle manufacturers.

For Canada’s canola industry, the hope is that Carney will secure relief from crippling Chinese tariffs ranging from 76 to 100 per cent that have effectively cut farmers off from their second largest export market. Same for Canadian pork and seafood workers, who are dealing with 25 per cent tariffs.

For Canada’s electric vehicle sector, the fear for many is that the prime minister lowers 100 per cent tariffs on Chinese electric vehicles that barred the cheap, heavily-state-subsidized autos from flooding the Canadian market.

Both issues are deeply interrelated as China imposed the canola tariffs in response to Canada’s EV tariffs, which were put in place years ago to follow the U.S. government’s lead in its battle for EV manufacturing supremacy in North America.

The high-profile meeting in Beijing’s Great Hall of the People at 11 a.m. Beijing time — the first one since 2017 and subsequent major chilling of diplomatic relationships — will be the culmination of a drastic about-face in Canadian foreign policy over the last year.

At this time last year, Canada viewed the world’s second largest economy as an “increasingly disruptive” force that was to be approached with great caution. In April, Carney described China as the greatest threat to Canada’s national security.

On Thursday in Beijing, Carney ushered in a “new era” in the Sino-Canadian relationship, describing China as a strategic partner and saying Canada is “heartened” by Xi Jinping’s leadership.

For many, the mark of success for this trip will be seeing if Carney manages to draw concessions from the Asian economic behemoth, namely on canola tariffs.

But any deal is fraught with landmines when its with China, a country infamous for its use of diplomatic and trade coercion.

One need not look farther than last August when China unveiled the 75.8 per cent tariffs on Canadian canola seed. The timing, just weeks before harvest season, was designed to deal maximum damage to the Canadian industry.

And there were the events that led to the big freeze in diplomatic relations in the first place: Canada’s arrest of Huawei top executive Wang Menzhou on behalf of the U.S., which led China to arbitrarily detain Michael Spavor and Michael Kovrig for nearly three years in response.

In the weeks leading up to the trip, the Canadian government repeatedly signalled that meetings in Beijing would cover far more than just tariffs, automobiles and the agri-food industry. Officials mentioned energy, manufacturing, and increasing connections between the Chinese and Canadian people.

On Thursday, on Carney’s first day in Beijing, details of the breadth of discussion topics became clearer.

Both governments signed a half-dozen non-binding deals for further collaboration and communication in the areas of oil, gas and nuclear energy, lumber, culture, tourism, food inspection and public safety and policing. They even signed an agreement to start dealing issues related to pet food trade.

At the same time, Carney and some of his ministers met with CEOs of investment funds and Chinese giants in EV battery and electricity grid storage, e-commerce, wind energy and oil and gas.

More to come.

National Post

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