Australia & China: Barley industry fears it is bearing brunt of Australia's 'fractured' relationship with China

Australia’s barley industry has raised fears it is bearing the brunt of “a fracture” in the relationship with China, as Canberra rejected the latest travel advice issued by Beijing as “disinformation”, The Guardian reported on July 14.

A parliamentary inquiry on July 14 heard calls from Australian agricultural groups for more help from the government to access new markets, amid concerns over the risks caused by a heavy reliance on China.

Industry players, however, have warned such a shift can’t be achieved overnight.

In the latest sign of increasingly frosty ties between Australia and its largest trading partner, Canberra has dismissed claims it is unsafe to visit or study in Australia as “factually incorrect and disinformation”.

China issued travel advice on July 13 evening citing the risk of Australian authorities conducting “arbitrary” searches of its citizens – mirroring the language that Australia used in its own travel advice regarding Australian citizens in China last week.

Australia’s Department of Foreign Affairs and Trade responded that law enforcement and other agencies “abide by Australian law at all times”.

“There is no basis to the suggestion Australian law enforcement authorities conduct arbitrary searches or property seizures,” a Dfat spokesperson said on July 14.

China’s foreign ministry on Monday hit back at the government’s offer to extend temporary visas of people from Hong Kong, saying Australia “abuses its counter foreign interference laws to intimidate Chinese nationals in Australia, while repeatedly interfering in the Chinese government’s lawful handling of Hong Kong-related issues”.

“Acting as a cat’s paw will eventually bring harm to oneself,” the spokesperson, Hua Chunying, said.

David McKeon, the chief executive officer of industry group GrainGrowers, told an inquiry into diversifying Australia’s trade and investment profile that China’s decision to impose steep tariffs on barley in May had effectively put a A$1.5 bln market “out of reach overnight for Australian farmers and exporters”.

Brett Hosking, the chair of the same industry group, said allegations about Australian subsidies and the “dumping” of products – which followed an 18-month investigation by Chinese authorities – were unfounded.

He said the industry was working with Chinese authorities in a bid to resolve the current dispute over barley but believed larger factors were at play.

“The real sense that we’ve had throughout this whole process, and it’s been an 18-month-long process, is that there seems to be maybe a bit of a fracture in the relationship between Australia and China,” Hosking told the joint standing committee on trade and investment growth.

“Perhaps barley has borne a bit of the brunt of that fractured relationship.”

Hosking said the industry was “looking to government for some real, targeted support in helping us develop new markets” and overcoming trade barriers.

McKeon said progress had been made on getting barley to India, although some barriers remained. He said there were “major lead times” involved in building new markets and it “isn’t something we can turn on and off overnight”.

China accounted for 29% of the total value of Australia’s agricultural, fisheries and forestry exports in 2018-19, up from 21% four years earlier, according to figures compiled by the Department of Agriculture, Water and the Environment.

Such exports to China were now six times larger than they were at the turn of the century, the department said in its submission to the inquiry.

Some sectors were more exposed than others. China accounted for about 80% of the export earnings for wool, infant formula, rock lobsters, roundwood and skins and hides. The department said trade concentration could “sharpen” the consequences of a disruption in a key market.

David Hazlehurst, the acting secretary of the agriculture department, was asked to explain the claim in the submission that the “likelihood of a targeted trade disruption is reduced where there is mutual dependence, such as Australia’s live cattle exports to Indonesia and Vietnam or in the case of a range of Australia’s exports to China”.

The chair of the committee, George Christensen – who has been using the inquiry to campaign
forcefully against China’s “economic infiltration of our nation” and to collect contact details of supporters – likened the department’s statement to the Cold War theory of “mutually assured destruction”.

Hazlehurst said countries would operate in a way that they perceived to be in their own interests – but in the case of barley the Australian government view differed from that of China “and that’s not uncommon in other disputes around these sorts of matters between countries”.

Explaining the factors driving increased reliance on the China market, Hazlehurst said the prices that had been available for many agricultural products had been so high that many Australian agribusinesses had made the judgment “that the risk is worth taking”.

Now, however, “those judgments may be being recalculated by those businesses over time”. This comment echoed remarks by the trade minister, Simon Birmingham, about the practical effects of China’s “unpredictable” trade interventions.

Government officials pointed to the recently commenced free trade agreement with Indonesia and the current negotiations with the European Union and the United Kingdom as examples of “proactive steps that are being taken at a macro level to open up access”.

The Australian Sugar Milling Council told the inquiry raw sugar was “a difficult trade policy and market access subject” and “we win in some trade agreements and we miss out in others”.

“We do have aspirations for upcoming negotiations with the European Union, United Kingdom and we haven’t given up on particularly China and North America as well,” the council’s chief executive officer, David Pietsch, said.

17 July, 2020