The Canola Council of Canada says a free trade agreement with China would reduce tariffs and generate more exports.
A study commissioned by the Council says a reduction in the nine per cent tariff on canola seed would increase total sales of seed, oil and meal by up to $1.2 billion per year.
The study, done by the former deputy chief economist with the federal trade department, says that would be the equivalent of 1.8 million tonnes of canola, or about one-tenth of current annual production.
The report indicates the current Chinese tariff on imported canola seed is three times higher than those applied to soybeans.
This made canola $32 per tonne more expensive than it would be if it had the same tariff as soybeans.
The Canola Council adds resolving non-tariff trade barriers will also be required to take full advantage of Chinese demand. The recent Chinese concerns about blackleg underlines the importance of using science
to establish predictable trade rules.
China imported 4.8 million tonnes of Canadian canola last year—including 3.5 million tonnes of seed, 600,000 tonnes of oil and 660,000 tonnes of meal, making it the largest single market for Canadian canola.
The Canadian government has started consultations on a free trade agreement with China.