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EXCLUSIVE-Canada says China plans more meat import inspections, industry fears disaster

Kelsey Johnson

fears disaster@ (Recasts lead, adds quotes, details, reaction)

OTTAWA, June 4 (Reuters) - China plans to boost inspections of Canadian meat and meat product imports as bilateral trade relations deteriorate, Canadian government officials said on Tuesday, and meat industry executives warned this could have "a disastrous effect" on their business.

China has already blocked imports of Canadian canola seed and temporarily suspended permits from two pork plants. Beijing is demanding Canada return a Chinese executive who is facing extradition to the United States.

A Canadian agriculture ministry notice seen by Reuters said the embassy in Beijing had been told Chinese customs agents would open all containers of Canadian meat and meat products and in some cases 100% of the contents would be inspected.

Chinese officials cited "recent cases of non-compliance of pork shipments" and also said the move was linked to the risk of African swine fever and anti-smuggling measures, the Canadian ministry said in its notice. China's pork industry has been badly hit by a deadly outbreak of swine fever.

The Canadian Pork Council said the issue was linked to problems with supporting documents and not food safety. Still, the Canadian Meat Council (CMC), which represents major processors, urged members to "increase significantly the surveillance and compliance with all requirements" for exports.

"We cannot stress enough that the slightest 'non-compliance' could jeopardize our entire meat exports to China, which would have a disastrous effect on all CMC members," it said in a message to members seen by Reuters.

In the first three months of 2019, China was Canada's third biggest pork export market, taking C$215 million ($160.5 million) of exports.

"Reports of increased meat inspections are of little concern since we have always operated with the expectation that all shipments to China are being regularly inspected," said Gary Stordy, the Canadian Pork Council's director of government affairs.

Over that period, China was also Canada's third-biggest export market for beef and veal, buying C$48 million worth, according to Statistics Canada.

"I do know shippers are going to be wary of putting product on the water when they're not sure what's going to happen at the other end, if they're going to be treated fairly or not," said John Masswohl of the Canadian Cattlemen's Association.

The Chinese embassy in Ottawa did not immediately respond to a request for comment.

Canadian officials said China has not yet responded to repeated requests for talks on canola.

Before news broke of the meat inspections, Canada Trade Minister Jim Carr said in an interview on Tuesday that Canada had not received any assurances from China that business would return to usual on commodities affected by disputes.

Canada's opposition Conservative Party, which leads the ruling Liberals in opinion polls ahead of an October election, has said Prime Minister Justin Trudeau has bungled relations with China.

"The Chinese government has now set its sights on our livestock industry ... when will the prime minister realize that his inaction is devastating Canadian farmers and ranchers?" asked Luc Berthold, the party's agriculture spokesman.

A spokeswoman for federal Agriculture Minister Marie-Claude Bibeau promised to react later on Tuesday.

Brazil said on Monday it had temporarily halted beef exports to China following an atypical case of mad cow disease. ($1=1.3395 Canadian dollars) (Additional reporting by Rod Nickel in Winnipeg, writing by David Ljunggren; Editing by David Gregorio)