Australia’s agriculture sector’s dependency on China as a major trading partner has long been a matter of concern with warnings about the risk having too many eggs in one basket.
More than a year after China ramped up tariffs on Australian barley and beef, in an act of vengeance for remarks made about the origins of the coronavirus by our government, they moved to restrict the import of seafood and massively hike tariffs on our wine.
When China decided to punish Australian barley exports with an 80 per cent tariff, many growers feared they would face financial ruin.
Prices initially collapsed, but when adversity strikes necessity meant that a search for new markets for the grain began in earnest.
The efforts to find other buyers has paid off with countries such as Saudi Arabia and Mexico taking our barley, in addition to India’s strong demand.
Speaking recently, Queensland Resources Council chief executive Ian Macfarlane, a former long-serving Federal Resources Minister, said India in particular had picked up much of the slack because of its economic efforts to recover from the pandemic.
“The lesson that’s been learned is to not put all your eggs in one basket,” he said.
“Companies have moved to other markets − they’re building long-term relationships there, which will stand them in good stead well into the future.”
During his recent visit to Mildura, Deputy Prime Minister and Nationals leader Michael McCormack, in response to a question regarding China’s unfriendly penalties imposed on our agricultural exports, said that Australia had recently sent its first shipment of barley to Mexico, which is one of the markets being targeted by the grain industry.
“That was made possible because of the good relationship that David Littleproud, the Agriculture Minister, and Trade Minister, Dan Tehan, have with our South American friends and we’ll continue to look for other markets,” Mr McCormack said.
“We will continue to look to diversify what we do in the space of trade, because trade equals jobs and more trade equals more jobs.
“Yes, we’ve been very reliant on some particular markets and we now need to look at other prospects and to make sure that we utilise those, because like I say, we’ve got the best food and fibre and the world knows it and the world wants it.”
Mr Tehan said this week that a Free Trade Agreement being negotiated with the post-Brexit United Kingdom, was still a work in progress and not without its hurdles, particularly in regard to beef and lamb exports.
Australia and the United Kingdom of Great Britain and Northern Ireland (UK) launched negotiations for a free trade agreement (FTA) in June last year.
During his visit to the UK in April, Minister Tehan and UK Secretary of State for International Trade, Liz Truss, agreed to continue regular discussions as part of a “sprint” to this June’s G7 Summit to prepare for an announcement of an agreement in principle on these negotiations by Prime Ministers Morrison and Johnson.
The fifth negotiating round commenced on May 4, this year and is ongoing.
From the UK government’s point of view a FTA with Australia is part of delivering the government’s top strategic trade priority of using its voice as a new independent trading nation to champion free trade, fight protectionism and remove barriers at every opportunity.
The government’s ambition is to secure FTAs covering 80 per cent of UK trade within the next three years, to become a truly global Britain.