Sino-U.S. Trade Deal Leaves CDN. Farmers with Questions

The newly signed U.S.-China trade deal that includes a significant boost in Chinese purchases of American products has calmed global trade tensions for now, but leaves a number of crucial questions unanswered for Canadian exporters.

For all its pros, such as a long list of U.S. products that will benefit from China’s $200-billion U.S. purchase commitment, it does not include quantities. Soybeans, fresh and frozen pork, beef, wheat, corn, barley and a range of machinery are among the goods listed.

That’s a concern for Canadian exporters, particularly agricultural exporters who have found themselves caught in the dramatic upheaval of trade patterns caused by the U.S.-China trade dispute. Canadian exports of wheat to China, for instance, rose to 2 million tonnes in 2019, a threefold increase over normal levels posted in the years prior to the trade dispute, said Cam Dahl, president of Cereals Canada.

Dahl also says a cooling off of the trade disagreement between the US and China, combined with the Chinese pledge to buy an undisclosed quantity of U.S. wheat, could see much of that demand lost. Moreover, it's murky how the deal will comply with World Trade Organization rules that preclude discrimination against some markets in favour of others, unless a full free trade agreement is forged. The U.S.-China deal covers only a limited range of goods.

"This probably falls into the category of managed trade rather than free trade," Dahl said. "And I think the questions about WTO compliance are still very much out there."