Home News Trade war fallout continues as exporters hope for good news

Trade war fallout continues as exporters hope for good news

by News7
Trade war fallout continues as exporters hope for good news

Australia’s trade war with China isn’t over, yet.

For those exporters staring down another year locked out of their most lucrative market it’s difficult to see who is winning. 

It may seem like the trade relationship is warming, with Beijing allowing coal, barley, timber and a few meatworks to resume trade last year.

But wine, lobster and some of the country’s largest beef exporters remain collateral damage in a diplomatic stoush ignited in the early months of the COVID-19 pandemic.

A man with lobster nets on a boat with colourful dawn sky.

There’s no indication of when China will resume imports of Australian rock lobster.(ABC News: Steven Schubert)

If, and when, trade with China resumes for these exporters it will likely represent a very different marketplace.

Some of Australia’s largest meat exporters are just months away from notching up a four-year anniversary since China’s decision to ban their beef, based on labelling concerns.

At the time, the four meatworks, from Queensland and NSW, were considered to represent more than a third of Australia’s beef exports to China, a trade that had been on track to reach $3.5 billion that year.

More beef exporters have been blocked since with no indication of when trade could return.

In 2020, Australian lobsters were stopped over quarantine concerns.

Despite strong rumours that the $700-million-a-year trade was set to resume to China last March, it still hasn’t.

Meanwhile crisis talks are spreading in wine grape growing regions around Australia, a flow-on effect of China’s 2020 decision to impose tariffs, effectively wiping out a billion dollars of business every year since.

A woman wearing a black dress sits in front of grape vines and a clothes line

Simi Gill says wine grape growers are struggling to pay their bills as they experience another year of low prices.(ABC News: Nathan Morris)

In South Australia’s Riverland, grape grower Simi Gill says many farmers have “become numb” as the cost of maintaining vines far outpaces the returns growers are paid.

“A lot of farmers, I would say the majority of farmers, had to put grapes on the floor,” Ms Gill said.

She told the ABC, shiraz and cab sav grapes that might have earned $650 a tonne when China was buying, are now likely to fetch as low as $120 a tonne.

Another grower has likened it to 1970s prices.

Just a few years ago Australia sold more than $1 billion of wine to China, last year it was closer to $10 million. 

The wine industry is now working on a proposal to government, to seek financial assistance for growers caught out by the grape glut. 

Before Anthony Albanese’s visit to China last year, the federal government announced what it considered a breakthrough on the wine exports; Australia suspending its complaint at the World Trade Organization while Beijing reviews the tariffs.

China’s press has reported that the review will conclude by November 30, but Australia remains adamant the matter must be resolved by March 31 (Easter Sunday) or it threatens to resume its WTO complaint.

In many ways the wine process mirrors that of the barley tariffs — it was a similarly valued commodity, Beijing claimed anti-competitive behaviour, huge tariffs were applied, the trade stopped, and the independent umpire was called in.

In the case of barley, Australia suspended its WTO complaint and a Chinese review of tariffs led to their end last year with shipments resuming almost straight away.

Grape growers and the Australian government hope desperately for a similar outcome on wine.

Chinese President Xi Jinping raises a glass of wine while standing in front of a Chinese flag

Before China imposed tariffs on Australian wine the trade was valued at more than $1 billion per year.(Reuters)

But unlike barley which is sold as a raw product and used in China’s manufacturing sector, imports of Australian wine create far fewer jobs in China.

Instead the luxury item creates competition, as this paper points out, for China’s influential and domestic wine industry.

China’s economic downturn means it’s unlikely to be as valuable a marketplace as it once was; an issue for all Australians selling to China.

Australia’s Trade Minister Don Farrell met with his Chinese counterpart on the sidelines of a World Trade Organization pow wow in Abu Dhabi this week, a chance to once again press the case of Australia’s winemakers, farmers and fishers.

A man in wearing a suit leans on his desk

Australia’s Trade Minister Don Farrell met with his Chinese counterpart,  Minister of Commerce Wang Wentao in Abu Dhabi.(Supplied: Australian Government)

In the Riverland, wine grape grower Simi Gill says she “salutes” the government’s attempts to fix the trade but fears for those for whom it will be too late.

“When will it come into effect? What about the delayed effects of the political conversations that have happened?” she asks.

“I feel like all of Australia is not aware of what’s happening, I do not think that Australians are aware.”

The trade war has sent her industry to the brink and it’s not clear who’s coming back.

Posted , updated 

Source : ABC News (AU)

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