Ag exporters eagerly await outcome of China meeting
Beef, barley, timber, wine and lobster exporters hope the PM’s meeting with the Chinese president will thaw trade relations.
Agricultural exporters are eagerly awaiting the outcome of Australia’s first meeting with Chinese President Xi Jinping in six years.
Australia’s thawing relations with China could pave the way for a resumption of billions of dollars’ worth of agricultural exports currently subjected to trade sanctions.
Prime Minister Anthony Albanese will meet Chinese President Xi Jinping on Tuesday afternoon, ending six years of silence between the nations’ leaders.
The bilateral relationship was brought to its knees two years ago when former prime minister Scott Morrison called for an independent inquiry into the origins of Covid-19.
Mr Albanese is expected to use Tuesday’s meeting to push for an end to two years of trade sanctions against $23 billion worth of Australian exports, including wine, barley, beef, timber, cotton, rock lobster and sugar.
The trade restrictions are widely believed to be in retaliation for Australia’s strong rhetoric on the origins of the pandemic.
National Farmers’ Federation acting chief executive Warwick Ragg said farmers were hopeful the meeting would make inroads to reviving access to China.
“Our farmers export about 72 per cent of what they grow and rely on an increasingly diverse range of export markets. Australian farmers would benefit significantly from renewed and improved access to this significant and highly valuable market,” Mr Ragg said.
China has said it was willing to “meet Australia half way”. Any concessions made will be seen as progress towards its longed-for entry into the Comprehensive Progressive trans-Pacific Partnership.
Episode 3 market analyst Andrew Whitelaw said if the Australia-China relationship continued to thaw and resulted in renewed market access, the improved trade flows would be hugely beneficial.
Mr Whitelaw said the current stalemate was lose-lose for both countries: Australian exporters were losing an average $40 per tonne without the Chinese market, while China was paying more for barley from other countries.
And while barley exporters had found new markets in the wake of the trade sanctions, China was still the biggest market.
“At the end of the day, the trade will move to whatever is the best price available and in many cases that will be China,” Mr Whitelaw said.
“I’ll take a bet with anyone: when China opens up to Australian barley, within two years they will be our biggest customer, regardless of how we’ve diversified markets.”
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