Australian farmers call for separation between foreign relations and trade ties with China
|
Version 0 of 1. Elders chief says Australia’s trade with China is being used as a ‘weapon for foreign affairs’ Agricultural business leaders concerned about the impact rising tensions with China will have on exports are hoping to explore a “separation of powers” between Australia’s foreign relations and trade ties with China. Mark Allison, the chief executive of agribusiness giant Elders, is among those concerned, lamenting that trade is used as a “weapon for foreign affairs” and that strong links between Chinese and Australian companies should be able to flourish despite future hostilities. His comments come after Agribusiness Australia, the body representing the country’s agricultural companies, producers and exporters, released its State of the Industry report last week, which found Australian agriculture is set to fall $12bn short of its 2030 target of $100bn in production value. The report calls for a revamp of the way the sector operates, including shifting its target from $100bn in farmgate revenue, to a $300bn target of value created across the supply chain. As part of the measures to achieve this, the report calls for the sector to “embrace environmental, social and government” factors, and “[embed] sustainability into all areas of the agribusiness supply chain, particularly in water stewardship” to attract investors from countries, mostly in Europe, who value this from producers. The report also calls for the industry to “diversify market access” by “harnessing global free trade agreements”, and identifies the “substantial economic potential” of China’s Belt and Road Initiative for Australian agricultural exports. It says the physical road and rail infrastructure across Eurasia involved with the initiative “presents substantial opportunities for Australia to take advantage of”, and notes that it not only allows for easier trade with China, but for potential new buyers of Australian products to access our goods quicker and cheaper. “The Australia-China relationship will be vital to any utilisation of the B&R, however this initiative does not limit trade relations to just China,” the report says. “There is a huge potential to utilise this modern silk road to unlock trade with Eurasian nations that are not big trade partners in 2020. “As Australian agriculture is currently 6.3% below the trend growth required to achieve the sector target of $100bn (AUD) by 2030, global trade opportunities like the B&R are paramount to the success in this sector.” However, Allison, who is also the president of Agribusiness Australia, acknowledged current tensions mean Australia is unlikely to take advantage of Belt and Road, and that this could not only limit trade to new Eurasian markets but make agricultural export less competitive to China compared with countries that are party to the initiative. “One aspect is selling products to China, and opening the road to western China,” he said. “It also opens significant markets, to all the countries on the Belt and Road pathway, if we’re on the inside. “Geopolitically it seems that we won’t be on the inside, that’s highly unlikely,” he said, noting recent tensions have “created an issue the sector needs to be aware of”. He said Australia not being a part of Belt and Road makes imports from competing countries, including grains from Ukraine and Georgia, more attractive to the Chinese market, because despite the better quality assumptions about Australian products, prices would be higher, as other countries’ “cost of labour and goods are already lower”. Allison believes that China’s recent tariffs imposed on Australian barley and the banning of beef imports from four Australian abattoirs were not political but linked to anti-dumping and compliance issues officially cited by China. He said the question of how Australia’s souring relationship with China, seen since Canberra pushed for an international investigation into Beijing’s handling of Covid-19, had spurred questions at an Agribusiness Australia conference this week of how relationships between Australian and Chinese businesses could continue to flourish in the future. “Foreign affairs is about protecting sovereign countries, and trade is about growing business,” he said. “But trade is used as a weapon for foreign affairs, and it runs counter to the objective. “I think there’s a concern that there may be a real detriment to one of our key growth markets, which will soon be the largest economy in the world.” He said the sector was keen on strengthening relationships with Chinese businesses “to purely focus on trade ... almost like a separation of powers” from the diplomatic hostilities. However, Richard McGregor, a senior fellow at the Lowy Institute, said for the state of foreign relations with China not to impact trade, it would ultimately require Beijing to agree not to pull trade levers. “It’s not a one-way street ... and China has made it very clear, not just with Australia but with other countries, that politics can affect trade,” McGregor said. Earlier this month, the Rural Bank warned Australian beef exports into China are set to face increasing competition, and urged wool producers to minimise their roughly 75% export reliance on Chinese demand as trade tensions escalated. Tensions with China escalated as Australia pushed for an inquiry into China’s initial handling of the Covid-19 outbreak, with the trade minister, Simon Birmingham, complaining his Chinese counterpart would not answer his calls in May. Since then, China has issued a warning to its citizens, and lucrative international student market, not to travel to Australia out of fears of racism. In June, Chinese foreign ministry spokesman Zhao Lijian accused Australia of mass espionage and of “stoking confrontation”. |