Adapting to a new world order
Remember 2018? In December of that year, Canadian authorities arrested Huawei’s chief financial officer, Meng Wanzhou, to be extradited to the United States. China responded by detaining two Canadians and by changing a drug smuggling sentence against a third Canadian to the death penalty. Ottawa expressed serious concerns about these actions taken by China, but agriculture was not spared either, as trade between China and Canada slowed significantly. Canadian exporters had to find other routes to get to China.
Some experts suggest that was the moment when the Second Cold War started and that it will last a while, perhaps as long as the last one. Canada needs to be ready for this. Unlike the First Cold War, agri-food trades can be weaponized since we now have massive economic involve ment b et ween nat i o ns. Knowing more about your enemy is much, much easier now. Our economies have provided open access to people and data. This is not at all reassuring.
According to Farm Credit Canada, after canola and wheat, crustaceans such as lobster, crab and shrimp were Canada’s third-largest agricultural export to China last year, with a value of over $1 billion. Canada’s agriculture and agri-food products worth more than $8 billion were consumed by China, which happens to be the second-largest export market for Canada. In contrast to numerous other trading partners, exports to China have been on a continuous rise and were not affected by the global economic crisis. But that relationship also comes now with some significant diplomatic baggage. Canada essentially feeds China, and has done so for a few decades now. But China has also grown, and has increased its capacity to feed itself.
Despite having less than 10 per cent of the world’s arable land available for cultivation, China manages to produce one-fourth of the world’s grain and feed one-fifth of the world’s population. China’s agricultural output is the largest globally, yet only 10 per cent of its total land area can be used for farming. And the country is only getting more efficient.
Some may argue that China is not worthy of our democracy and no such relationship is warranted. It’s hard to argue with that. Still, making a statement now will always come with a response, and China is in a powerful position to hurt many nations through trade sanctions.
Global food geopolitics aren’t what they used to be. During the First Cold War, you just picked a side. Canada picked the side which won in the end. With the Second Cold War, it’s China on the rise against a weakening United States, along with Europe, South America, the Middle East and everything else in between, including Canada. It’s not that simple.
Picking the side of the U.S. this time will come with great risks. Canada’s relationship and proximity with the United States is a growing problem for our country, no matter who’s in power. Many agri-food trade groups like the Lobster Council of Canada, the Canadian Meat Council and the Canola Council are fully aware that the writing is on the wall, and have already made efforts to open new markets in the Asian-Pacific region. Ottawa just opened an office in the region for that exact purpose. India is certainly an underdeveloped market for Canada. Increased export market diversity, beyond the United States and China, is more critical than ever.
Long gone are the days of prime minister Pierre Elliott Trudeau’s love affair with China in the ’70s. The “America buys while China sells” paradigm is ending as China is no longer cheap and an afterthought; it aims to dominate. With significant holdings of America’s debt and control over many parts of Africa, a new world order is well underway.