Thousands of Australians jobs are at risk after China suddenly banned imports from four major abattoirs, as the federal government pursues a global inquiry into the origins of the coronavirus outbreak.
And the move is going to hurt us – 18 per cent of Australia’s beef production is exported to China, with exports worth more than $3 billion a year.
The four meat works involved – JBS Australia’s Beef City facilities at Toowoomba and Dinmore, Kilcoy Global Foods north of Brisbane and Northern Co-operative Meat Company at Casino in New South Wales – account for roughly 35 per cent of Australian beef exports.
Beijing suspended the abattoirs “effectively immediately” after customs officers detected “repeated violations” of inspection and quarantine requirements, China’s Foreign Ministry spokesman Zhao Lijian told reporters on Tuesday.
Queensland Premier Annastacia Palaszczuk said the trade tangle threatened more than 3000 jobs in her state.
“What I’m really concerned about is this potential for a trade war to erupt and to damage Queensland’s exports, reputation, jobs and livelihoods,” Ms Palaszczuk said.
“If we go into a full-blown trade war this could mean over 3200 workers impacted — this is really serious.”
The ban is the latest shot fired between the two countries amid escalating trade and diplomatic tensions.
On Monday, China also threatened to slap an 80 per cent ‘dumping tariff’ on Australian barley (a penalty for allegedly selling barley too cheaply).
Australian exporters and the government have been given 10 days to respond.
But the kick to our agriculture industry runs deeper than a series of technical infringements.
Australia’s relationship with China has been heavily strained since Prime Minister Scott Morrison began pushing for a global inquiry into the coronavirus.
Beijing’s ambassador warned China could boycott Australian produce if Mr Morrison persisted.
On Wednesday, Trade Minister Simon Birmingham said his Chinese counterpart had ignored his request for a meeting.
Trade war or just a temporary tiff?
It’s likely to be a temporary tiff, according to James Laurenceson, acting director of the University of Technology Sydney’s Australia-China Relations Institute.
“It’s designed to send a message rather than inflict genuine economic harm,” Professor Laurenceson told The New Daily.
“Agriculture is the obvious target because services, which would normally be the other one through tourism and education, have been removed as objects of retaliation by the Australian government closing the border.”
He said it was important to remember these trade strikes were “pretty limited” in the context of Australia’s broader exports to China.
“We export now $150 billion to China – it’s never been higher,” Professor Laurenceson said.
“We are talking about very targeted and specific issues here. We’re not talking about our entire trade relationship with China.”
It’s not unusual
“Trade restriction measures are, like it or not, not unusual at all,” Professor Laurenceson said.
“In fact, it’s true that Australia has far more trade restriction measures in place directed at China than the reverse.”
China’s steel industry has been the subject of Australian anti-dumping tariffs, as well as other industries like aluminium products, clear float glass, stainless-steel sinks, wheels, solar panels or A4 copy paper.
Of the 30 anti-dumping measures currently in force, 18 apply to China.
When will it start to hurt?
Victorian livestock agent Justin Keane, director of Corcoran Parker livestock trading in Wangaratta, said China’s beef ban would take a heavy toll on the industry if it lasted until spring.
“The worry is not for today – it’s for springtime. That’s when producers or people who have cattle for sale will have more cattle available for slaughter,” Mr Keane told The New Daily.
“Any country taking our product is important, but China has become more important in the last couple of years.
“If we don’t have our export arms open, we’ve got a problem.”