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New Trade Ties Sought by Australian Exporters

New Trade Ties Sought by Australian Exporters

(17 May 2021 - Australia) A year after China first implemented tariff trade barriers on selected Australian commodities, negatively impacted exporters are actively taking action and shifting to new trade corridors by exporting and importing with new trade partners.

On the first anniversary of Chinese trade restrictions on Australian exporters, the value of lost trade is estimated at A$10 billion, despite a significant volume offset by shifting to new markets in South East Asia in particular, highlighted in East & Partners latest Research Note - Shifting Trade Corridors – Can Banks Keep Up?. Barley exporters have rotated to new markets such as Saudi Arabia as record rainfall results in bumper crops for Australian producers.

Premium products such as wine and lobsters are suffering the greatest level of disruption. This appears to be the “new normal” for trading enterprises to overcome as hope of a thawing in Australia-China trade conflict is fading quickly.

The collapse in amicable inter-governmental dealings is a stark contrast to the China-Australia Free Trade Agreement (FTA) ratified in Q4 2015.

"If China's goals were to change Australian policy, inflict economic damage or to send a warning to third countries about crossing Beijing, then I think it's safe to say China has basically been failing on all three accounts” commented Lowy Institute Lead Economist, Roland Rajah.

"We still have the mining-driven story in terms of our relationship with China. But it does seem that this idea that China is going to be an economic boon for the rest of the Australian economy, that now is very much thrown up into question and quite possibly irrevocably. There was this broadening out of the economic relationship with China" Mr Rajah added.

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