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UPDATE 1-Canada taking first formal step at WTO to challenge China's canola ban

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OTTAWA, Sept 6 (Reuters) - Canada, locked in a major dispute with China, is taking the first formal step at the World Trade Organization to challenge China's decision to block Canadian canola exports, Trade Minister Jim Carr said on Friday.

Carr said in a statement that Ottawa was seeking bilateral consultations with China at the WTO. If these talks fail, Canada can request adjudication by a WTO panel.

China, angry at Canada's detention of a top Huawei Technologies Co Ltd HWT.UL 3/8 executive on a U.S. arrest warrant, blocked imports of canola seed in March.

"We have continuously been engaging with China at multiple levels. The issue is that we're not seeing progress fast enough and as we would with any trading partner, this is the next step," Carr spokesman Michael Jones said.

In 2018, Canada exported C$2.7 billion worth of canola seed to China, a market that accounted for approximately 40% of Canadian canola exports. Canadian canola stockpiles surged to an all-time high this summer amid slumping sales to China.

Carr made his announcement a day after Foreign Minister Chrystia Freeland said Canada and China had formally approved each other's choice of new ambassadors. (Reporting by David Ljunggren Editing by Chris Reese)