Farmers are not convinced of a quick resolution of the trade dispute with China after the Commonwealth government tore up the Victoria Belt and Road agreement with Beijing.
- Farmers fear China will respond to Australia’s decision to tear up BRI deal with Victoria
- Australian winemakers try to find alternative markets after China imposes huge tariffs on imports
- Australia’s grain industry braces for fallout
Australia has been in a trade dispute with China for more than a year, with major agricultural exports such as barley, wine, meat, lobster and hay from the past month all affected.
There are fears that the latest move by the federal government may mean more restrictions will be placed on Australian exports to China.
“I think as far as the wine industry – whether it is the Victorian or Australian industry – it won’t make any difference … it can’t make it worse,” said Alister Purbrick of the Tahbilk winery. in central Victoria.
Mr. Purbrick lost a quarter of his business when Chinese authorities took anti-dumping action against Australia by accumulating tariffs of more than 200 percent on its wine imports into China.
“It hurts, there’s no doubt about it,” he said.
The family wine company is now trying to find wine already packaged for the Chinese market elsewhere in the world.
“I think there could be retaliation and that retaliation could relate to an industry that has not been affected so far,” Purbrick said.
Trade tensions are likely to ignite
Sydney University of Technology’s Australian Institute of China Relations director James Laurenceson said the Belt and Road Initiative (BRI) deal didn’t mean much, but the fallout would ignite tensions that had been calm in recent months.
“Let’s be clear, what was canceled was a non-legally binding agreement that committed the Victorian government to nothing, let alone the national government,” he said.
Professor Laurenceson said China had already imposed restrictions on “easy targets” and any further restrictions placed on other agricultural sectors by China would create major problems.
“There is no doubt that this is a real risk,” he said.
“You can imagine that a few industries could still be vulnerable, dairy products, and other measures the Chinese government could take with regard to beef.”
The grain industry has also lost access to the Chinese barley market.
China was Australia’s largest export market for barley before the Beijing government imposed anti-dumping duties on Australian exports, ending the trade overnight.
Brett Hosking is a farmer in Quambatook in Northwest Victoria and is President of Peak Body Grain Growers Limited.
He supports the federal government’s decision to tear up the BRI with China, but is bracing for the fallout.
“Having a single voice speaking on behalf of Australia is probably the way forward rather than multiple agreements across the country,” Hosking said.
“I understand the ambition, but that doesn’t mean it won’t cause hiccups along the way.”
The dispute between Australia and China over barley tariffs has been referred to the World Trade Organization (WTO).
On April 30, Australia will request the formation of a panel to determine whether the tariffs are fair.
Hosking believes ending the Victoria BRI deal won’t change the outcome of this dispute, but he will monitor the fate of other grain exports to China.
“As far as barley is concerned, the damage has already been done,” he said.
Foreign investment is drying up
Exporters are suspicious of what might be the next commodity to place on China’s trade cutting block.
But it is not only exports that will suffer.
China is a big investor in Australian agriculture and Professor Laurenceson has warned that these funds are drying up.
“There is no improvement on the horizon as far as I can see.”