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Blackleg or blackmail? Economics of the Canada–China canola trade dispute
Author(s) -
Cardwell Ryan,
Brewin Derek G.
Publication year - 2019
Publication title -
canadian journal of agricultural economics/revue canadienne d'agroeconomie
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 37
eISSN - 1744-7976
pISSN - 0008-3976
DOI - 10.1111/cjag.12203
Subject(s) - china , international trade , world trade , government (linguistics) , business , economics , international economics , political science , law , linguistics , philosophy
The Chinese government's recent decision to suspend the export licenses of two Canadian grain firms has garnered international attention. The dispute has been portrayed by some as a diplomatic dispute between two countries, and by others as a concern about plant health. We analyze the economics of the dispute, including a simple economic model of international trade in which a large‐country importer imposes a targeted import ban on one large‐country exporter. The model provides a framework for understanding the economic effects of a trade ban under various market conditions. We also discuss the legal framework and dispute settlement process that would be encountered if the disagreement proceeds to a formal dispute in the World Trade Organization.