Page 8 - National Poultry Newspaper

Asia takes the lion’s share of Australia’s agricultural exports. Seven of the 10 top export destinations by value are Asian nations. China leads the way, and in 2017 purchased 20 percent of exports of Australian priority products identified for this study, valued at more than $US5 billion.
NEW research shows uncertainty from ongo- ing bilateral trade wars between China and the US have set the global trading environment back decades and under- mined Australian agri- cultural exports.
A comprehensive Agri- Futures Australia-funded report released recently gives policy-makers, in- dustry peak bodies and primary producers a road- map as to how a less-pre- dictable trading environ- ment may impact export markets.
AgriFutures Australia managing director John Harvey said the ITS Glob- al analysis, Bilateral trade wars: Understanding the implications for Austral- ian agriculture, gives the industry a firm footing for policy creation.
“This robust analysis gives Australian exporters the knowledge they need to take a leadership role in attempting to restore stability for agricultural commodities in the cur- rent global trading en- vironment,” Mr Harvey said.
“The findings show unilateral moves by the Trump administration to renegotiate existing trade agreements have threat- ened World Trade Or- ganization principles of a rules-based trading sys- tem, creating uncertainty for Australian agricul- ture.”
The report identified a wide range of risks and opportunities for Austral- ia’s agricultural interests arising from the current trade wars, finding some Australian products are likely to fare better than others.
AgriFutures Australia senior manager Business Development Jen Medway agreed that while some industries will prosper and others may feel the pressure from these trade wars, understanding the potential impact is funda- mental to creating stabil- ity in an unsettled trade environment.
“Australia’s dairy indus- try is one industry that could potentially benefit from trade opportunities with China on the back of additional tariffs imposed on US dairy products,” Ms Medway said.
“On the flip side, a pro- spective US-Japan free trade agreement could negatively impact the dairy industry as US pro- ducers disadvantaged in the Chinese market could gain improved access to Japan.
“For the Australian wool industry, the bilateral trade wars may not have a noticeable impact, de- spite China implementing retaliatory tariffs on some US wool products.
“The relatively small size of the US wool ex- port market to Asia will
buffer any significant un- certainty for Australian wool exporters as a result of the increased tariffs.”
This is similar for Aus- tralian sheep and goat meat exports, primarily lamb, where the aftermath of the trade wars are ex- pected to be minimal.
These products have not been the focus of ad- ditional tariff actions, however a US-UK FTA (following the UK’s exit from the European Union) would have a negative im- pact on some Australian markets.
“The UK is a leading sheepmeat exporter and the US is Australia’s most important market,” Ms Medway said.
“Any improvement in access for UK product in- to the US would be dam- aging to Australia’s export interests.”
Another area we may see increased competi- tion is in Australia’s fresh, chilled and frozen beef exports due to risks iden- tified in Australia’s two biggest beef export mar- kets – Japan and the US.
“The US is increasingly eager to expand its export reach of beef products into Japan, with the US having very limited ac- cess to China and the EU due to a ban on hormone growth promotants,” Ms Medway said.
“With the US and Ja- pan edging closer to ne- gotiating a bilateral FTA, Australian beef exports to Japan may suffer.”
Mr Harvey acknow- ledged the importance of the report findings, not- ing they are critical to putting rigor around our understanding of the top line impacts for agricul- ture products as a result of trade wars.
“It will inform Austral- ian industry input on how best to ameliorate the det- rimental side effects of current and possible fu- ture trade measures,” Mr Harvey said.
Mr Harvey added the take-away message from the research is trade wars breed uncertainty.
Uncertainty is bad for business and leaves agri- cultural producers, traders and buyers struggling to manage a shifting policy landscape.
“The longer this period of uncertainty lasts, the more commercial de- cisions will need to be made by Australia’s agri- cultural stakeholders fac- ing the prospect of sudden and unpredictable policy changes at the global lev- el,” Mr Harvey said.
As a medium-sized, open economy dependent on trade to underpin eco- nomic growth, Australia benefits significantly from the confidence and predictability inspired by the smooth operation of the international trade re- gime.
New ‘no rules’
trading environment
unsettles Australian
agricultural exports
Page 8 – National Poultry Newspaper, June 2019
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