News

Red meat sector would welcome new China dialogue

Terry Sim, May 25, 2022

AMIC CEO Patrick Hutchinson: would welcome a resumption of dialogue with China.

AUSTRALIA’S red meat processors have welcomed the prospect of a reset in inter-government relations with China, especially on the issue of trade sanctions.

Recent statements from Chinese officials and in the nationalistic Global Times, and responses from new Prime Minister Anthony Albanese have raised speculation of a reset in the Australia-China relationship.

Mr Albanese has said Australia’s relationship with China will remain a difficult one and he would put Australia’s national interest and values first, but he would not play politics with national security issues.

On Sunday, the state-run nationalistic Global Times expressed a hope that the new Australian government deal with China in a “mature manner” to push the China-Australia relationship back on track. And China’s premier Li Kequiang has congratulated Mr Alabanese’s success in the recent election, with the state news agency Xinhua reporting that Beijing is ready to “look into the future” and Foreign Ministry spokesperson Wang Wenbin said: “China is ready to work with the new Labor government to take stock of the past and stay forward-looking.

“We should follow the principles of mutual respect and mutual benefits to promote sound and steady development of China-Australia comprehensive strategic relationship.”

At the Quad meeting in Tokyo Mr Albanese said in respect to China’s trade sanctions: “It’s not Australia that’s changed, it’s China that’s changed. It is China that placed sanctions on Australia, and there’s no justification for that, so that’s why they should be removed.”

China currently maintains trade sanctions on Australia barley and wine, but has also imposed barriers impacting imports of beef, sheep meat, timber, coal and lobsters. Two Victorian sheep meat processors have been unable to resume exports to China after voluntarily suspending shipments due to COVID-19 outbreaks in 2020. In May last year, China’s National Development and Reform Commission proclaimed it was suspending indefinitely “all activities under (the) China-Australia Strategic Economic Dialogue,” complicating the resumption of lamb exports to China from the plants.

Treasurer Jim Chalmers has told ABC News this morning that Australia would certainly like to see the trade sanctions lifted as they were damaging the economy and making life harder for some employers and workers.

“So obviously we would like to see those measures lifted, that would be a really great start; when it comes to how we manage what is a really complex relationship, a relationship that has become more complex over time.”

This afternoon Mr Chalmers said the China relationship is a complex “and is becoming more so because of China’s actions.”

“China has become more aggressive and more assertive and our responsibility as the incoming government is to manage that complex relationship in a considered and sober fashion if there is to be an improvement in relations.

“It makes sense to us for the first part of that, the first step, to be the removal of some of those sanctions and tariffs which are doing damage to our economy and to our employers and our exporters – that would be a good place to start.”

AMIC would welcome resumption of dialogue

AMIC chief executive officer Patrick Hutchinson today said any and all opportunities to reset Australia’s government-to-government relationship with China are welcomed.

“Our industry continues to have a strong trade with China, especially in sheep meat, which, with the lifting of temporary suspensions, can get back to 2019 record levels.

“As always, we respect the sovereignty of China to apply individual sanctions if they feel these are necessary,” he said.

“The issue for us is, and has always been, the loss of dialogue.

“Any improvements to reinstating that will always be warmly received.”

In an Asia Society Australia webinar on ‘The Future of Australian Agriculture in China’ in March, when asked for the meat sector’s attitude to engaging the World Trade Organisation over unfair trade practices, Mr Hutchinson urged a greater appreciation of the difficulty governments faced with the trade issues.

Mr Hutchinson said Australia had 10 meat processing establishments that had been temporarily suspended from China in the past two years.

“Some of those have been for labelling issues, some of those have been for residue issues and some of those have been for COVID-related issues.”

Mr Hutchinson said the meat sector situations were different to those in any other agricultural industry affected by China sanctions in that they don’t impact the whole industry.

“It only impacts those individual establishments that are accredited to export to China.”

Mr Hutchinson advised against getting “wrapped up” in seeking to “kick” the Australian or the Chinese Government on the trade difficulties as this would not provide answers “to anything that we are trying to move forward with.”

He said the meat sector issues related to individual establishments and there was not the opportunity to present an industry-wide case.

“There are different issues at different establishments, which is why they get a temporary suspension.”

He said government ministers and departments know the issues and scenarios, but also are in the difficult position of appreciating the broader geopolitical issue with China. The increase in Russian grain exports to China showed that Australia can be collateral damage in these trade situations, he said.

“But I think also we need to take a breath, we need to look at how our politicians are trying to manage the situation.

“It isn’t easy in any stretch of the imagination.”

He said Australian had to appreciate it was a global player in agricultural exports and very dominant in some areas, “certainly around red meat”, but also in grain, horticulture and dairy.

“So in all of these circumstances, the real thing for us is the fact that those receipts, two thirds or more of what we produce we export, and that is why you see those sensitivities coming to the fore.

“But certainly as a total industry — Australian agribusiness — you don’t want to be in a position where we are asking governments to change principles or feel as though they need to answer questions that potentially they would feel that the broader community would not want them to be engaging with,” he said.

“So really around diplomacy, the key component has got to be that we look at how well we are doing in China at the moment in some areas, where we have lost and start looking at where we’ve lost to then work out how do we then make those improvements.

“Those improvements may never come back and certainly from our point of view, the loss of our beef exports into China has been taken up by our wonderful partner, the US,” Mr Hutchinson said.

“So again, you know, for all of the geopolitical discussions we have, if we lose market share, it’s not another potential rogue nation that takes our place, this is in fact our overall global partners that take our place.

“So in all of that balance, being a politician trying to sort all this out, whatever side of the house you’re on, is extremely difficult and fraught with danger.

“So I think that we also need to turn around to our own politicians to look at the issues that they have to face more broadly and start to look at, not just how we operate within China, but more broadly about the issues overall, about agribusiness and agribusiness exports.”

Mr Hutchinson said Australia needed to continue to diversify its markets but not to see diversification as the only answer.

“Because we have lost more kilos of beef access into China than we will gain from the whole of the Australia-UK Free Trade Agreement on its own.

“It’s not about market access, it is about market longevity,” he said.

“Market longevity across all agribusiness areas is vital for us to continue and to thrive, it is not about finding new things each and every time.”

 

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