Australian farmers are watching the escalating trade war between the United States and China nervously, with growing fears Australian food and fibre exports could get caught in the crossfire.
National Farmers Federation chief executive Tony Mahar said there was little upside for Australia’s $47 billion rural export trade — 25 per cent destined for China — in the latest threats by US President Donald Trump to impose new 10 per cent tariffs on $US200bn ($270bn) of US imports from China.
The move follows China’s 25 per cent tariffs slapped on $US50bn of American exports to China of mainly agricultural produce, including soybeans and beef.
Mr Mahar said although there might appear to be replacement market opportunities for Australian beef into China, for example, the risks of massive world trade disruption and a return to high tariff regimes more than outweighed any short-term opportunistic benefits of an all-out US-China trade battle.
“No one wins from a trade war, however distant it might appear; our hope is that this volatile issue can be resolved without escalating tariffs and setting the global trade agenda back decades,” Mr Mahar said last night.
“Given Australia exports 80 per cent of the food we produce and has had a long commitment to free trade and liberalising markets, the reintroduction of increasing tariffs anywhere does not bode well for Australia.”
Gippsland vegetable and beef cattle producer Emma Germano also fears the repercussions of a potential trade war.
Ms Germano, 32, worries that while there may be short-term gains in the price of her export beef, Australian farmers eventually will face unintended consequences in other foreign markets.
“Everything in agriculture is about supply and demand in world markets, so producers and growers have to be mindful that when anything in world trade changes, it’s going to have an impact on us, including right down at the farm level,” says Ms Germano, who is president of the Victorian Farmers Federation horticultural division.
“While we have cultural and historical ties to the US, when it comes to trade, China is so much more important to us, especially with the rising middle class and their preference for clean, green and safe Australian food and produce; we can’t afford to take sides,” she said.
China is Australia’s largest agriculture, forestry and fisheries export market, with Australian food and rural produce valued at more than $12bn exported last year, up from $10.6bn in 2016.
Ms Germano, who has just bought her first farm — 200ha near Thorpdale — and is diversifying into heritage vegetables, beef and farm tourism, would like Australian politicians to watch their words, as the trade war intensifies, so as not to offend China.
She points to the ban three years ago by Russia on dairy imports from the EU following the shooting down of flight MA17 over Ukraine.
Australian dairy farmers originally thought the ban would help their own exports, but when the EU could not sell its butter, cheese and milk powder to Russia, it looked for other world markets.
A large volume was sold at reduced values to Asia, where Australia and NZ dairy exports were hit, crashing global dairy prices and contributing to the April 2016 dairy crisis and collapse of the biggest processor, Murray Goulburn.
“It’s dangerous times; hopefully Australia stays nimble and neutral enough to take advantage of things when we can, but not caught up in it all,” Ms Germano said.
By: Sue Neales
Source: The Australian