New research shows uncertainty from ongoing bilateral trade wars between China and the United States have set the global trading environment back decades and undermined Australian agricultural exports.
The AgriFutures Australia-funded report released last week will give policy makers, industry peak bodies and primary producers a roadmap as to how a less predictable trading environment may impact export markets according to AgriFutures Australia managing director John Harvey.
‘‘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 current global trading environment,’’ Mr Harvey said.
‘‘The findings show that unilateral moves by the Trump administration to renegotiate existing trade agreements have threatened World Trade Organisation principles of a rules-based trading system, creating uncertainty for Australian agriculture.
The report, Bilateral Trade Wars, Understanding the implications for Australian agriculture, identified a wide range of risks and opportunities for Australia’s agricultural interests arising from the current trade wars, but found some Australian products were likely to fare better than others.
AgriFutures Australia business development senior manager Jen Medway said while some industries would prosper, others could feel the pressure from these trade wars.
‘‘Australia’s dairy industry is one industry that could potentially benefit from trade opportunities with China on the back of additional tariffs imposed on US dairy products,’’ she said.
‘‘On the flip side, a prospective US-Japan free trade agreement could negatively impact the dairy industry as US producers 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, despite China implementing retaliatory tariffs on some US wool products. The relatively small size of the US wool export market to Asia will buffer any significant uncertainty for Australian wool exporters as a result of the increased tariffs.’’
This is similar for Australian sheep and goat meat exports according to Ms Medway, primarily lamb, where the aftermath of the trade wars is expected to be minimal.
Another area that may see increased competition according to the report is Australia’s fresh, chilled and frozen beef exports.
‘‘The US is increasingly eager to expand their export reach of beef products into Japan, with the US having very limited access to China and the EU due to a ban on hormone growth promotants. With the US and Japan edging closer to negotiating a bilateral FTA, Australian beef exports to Japan may suffer,’’ Ms Medway said.
Mr Harvey said the take-away message from the research was that trade wars bred uncertainty.
‘‘The longer this period of uncertainty lasts, the more commercial decisions will need to be made by Australia’s agricultural stakeholders facing the prospect of sudden and unpredictable policy changes at the global level,’’ Mr Harvey said.