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'Huge financial loss': Canadian meat producers concerned about China's meat ban

Canadian pork shoulders are being prepped on a butcher's counter at North Hill Meats in Toronto, Ontario, Canada on May 10, 2017. Picture taken on May 10, 2017. REUTERS/Hyungwon Kang

Canadian meat producers say they are concerned about China’s decision to ban imports of the country’s beef and pork products and that the move will “create huge financial loss” for the industry.

The Chinese Embassy released a statement late Tuesday that requested Canada suspend exports of meat to China after customs authorities found residues of ractopamine, a restricted feed additive, in a batch of pork products. China said a subsequent investigation found that falsified health certificates were attached to the batch of pork.

The Canadian Meat Council, an industry group representing meat packers, processors and equipment suppliers, released a statement saying it is working closely with the government to understand the situation and determine next steps.

“Meat processors, along with the entire meat and livestock industry, are extremely concerned as this will have a significant business impact on our sector and will create huge financial loss for our industry,” the Canadian Meat Council said.

“We are aware that Canadian government officials have been in contact with their Chinese counterparts and are hopeful this will lead to a quick resolution of the issue for trade to resume.”

China is a key market for both the Canadian beef and pork industries.

The Canadian Meat Council says China is Canada’s fifth largest export market for beef, valued at $97 million as of 2018, with exports jumping 388 per cent so far in 2019.

According to the Canadian Pork Council, China was Canada’s second largest market for pork products, with exports topping $514 million in 2018. Sales of pork products to China have increased 50 per cent so far in 2019. The move by China has set off a global chain reaction in pork trade, with other nations expected to pick up the demand.

“China is a very important market for Canadian producers,” the Canadian Pork Council said in a statement.

‘Fear’ of Chinese retaliation over Huawei

The ban on Canadian meat products comes as Canada grapples with a strained relationship with China following the arrest of Huawei Technologies executive Meng Wanzhou in Vancouver in December.

Since Meng’s arrest, China has detained two Canadians, Michael Kovrig and Michael Spavor. It also halted imports of Canadian canola in March due to concerns about pests, although the Canola Council of Canada has disputed this assertion.

Gordon Houlden, the director of the China Institute at the University of Alberta, said in an interview that while the Chinese government will not admit to it, Canada’s arrest of Meng has been a factor in the deteriorating relationship between the two countries.

“My bigger fear is that they are putting Canadian products through a very very fine screen the wouldn’t have been there otherwise if it hadn’t been for the Huawei issue,” Houlden said.

Carlo Dade, the director of trade and investment at the Canada West Foundation, said that while Canadian producers will certainly suffer a financial hit due to the latest decision, the good news is that China isn’t the No. 1 market for either industry.

“The bottom line is this is going to be a hit,” Carlos Dade said in an interview.

“But we do have options. The work that we’ve done with CETA (Canada’s free trade agreement with Europe), and the Trans Pacific Partnership are starting to pay dividends. We will survive this. But it is concerning.”

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