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UPDATE 1-Canadian PM warns G20 on protectionism, cites China

Published 12/04/2009, 08:28 AM
Updated 12/04/2009, 08:30 AM

* Harper says tentative signs of recovery emerging

* Says protectionism biggest threat to world economy

* Calls Chinese import rules on canola "ill-considered"

(Adds quotes, background)

By Ed Klamann

SHANGHAI, Dec 4 (Reuters) - Canadian Prime Minister Stephen Harper urged G20 member states on Friday to avoid protectionism, taking aim specifically at China's restrictions on imports of Canadian canola.

"Now more than ever, as tentative signs of recovery are emerging, Canada and China will need to keep our voices strong and united at the G20 table," Harper said in a speech to a business forum in Shanghai.

"The messages we must impart during this critical period will be threefold: first, we must urge fellow members to follow through on committed stimulus. Second, we must develop exit strategies to avoid inflation and asset bubbles. And third, perhaps most importantly, we must insist that all leaders stand firm against protectionist pressures.

"We have seen movements towards protectionism, albeit modest, since this global recession began. But modest or otherwise, protectionism is the single greatest threat to long-term recovery for Canada, for China and for the entire world economy."

The prime minister met with China's top leaders in his first visit to the Asian giant after nearly four years in office, which he said marked a significant new era in bilateral relations.

China had bristled at Harper's previous criticism of its human rights record, but friction has eased over the past year as a parade of Canadian ministers has visited Beijing and China has made several big investments in the Canadian resource sector.

This week, China lifted an import ban on pork from Canada, the United States and Mexico, which had been in place since the outbreak of the new H1N1 strain of influenza this spring. Canadian breeders would also like China to open the door to live hog imports [ID:nN01421484].

"We welcome China's decision to lift restrictions on Canadian pork, but ill-considered protectionist measures -- like restrictions on canola imports -- can only lead to increased pressures for retaliation and protectionism," Harper said.

China has restricted imports of Canadian canola, which it imports to use as cooking oil, citing concerns about the spread of blackleg disease, a fungus that can kill the plant but causes no risk to humans.

China is Canada's top export market for canola and the Canola Council of Canada estimates the dispute will cost the industry C$1.3 billion (US$1.2 billion). For more on that, please click on [ID:nN27429191] (Reporting by Ed Klamann, editing by Tom Miles) ((tom.miles@thomsonreuters.com; +86 10 6627 1200; Reuters Messaging: tom.miles.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))

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