Via The Australian:
Scott Morrison has flagged government support for producers hit by China’s trade sanctions as Australia moves to lodge a formal protest with the World Trade Organisation.
…“As a government we will be looking at how we can get a number of our producers through this difficult time,” Mr Morrison told ABC radio.
…The Australian understands government support for impacted sectors would not include an industry subsidy.
Mr Morrison said his government was working on diversifying export markets through new trade deals with Britain and the European Union.
“We have been working very hard on expanding trade opportunities,” Mr Morrison said.
Chinese tensions have been building for years. They are not an externality that could not be factored in. As well, it seems pretty clear to me that, in the case of agriculture, China was busy trying to bribe our farmers since the US trade war started with big surges in demand:
Notice that over the past two years there has been an extraordinary boom in exports of foodstuffs to China:
- it predated the FTA though continued afterward;
- it transpired even as political relations deteriorated from the start of the Sam Dastayari affair;
- it transpired throughout the ramp-up of the Trump tariff war.
It could simply be the fruits (if you’ll pardon the pun) of the developing trade relationship and Chinese consumer preferences for good Aussie produce. It might Australians benefitting from the trade war hostilities themselves as China displaced the US with us. It might be entirely innocent.
But little passes in China without some kind of central planning or approval. I suspect we were on the receiving end of economic coercion earlier than we all thought. The CCP was probably buying Aussie farmers and food industry hand-over-fist for the past three years of deteriorating relations to split them politically from the Coalition.
Farmers (and others) shouldn’t enjoy the good and pass the bad to taxpayers when it comes to dealing with China. Moral hazard for Chinese exporters will only prevent them from diversifying to new markets. To wit:
Treasury Wine Estates has announced a suite of measures to reduce the impact of surprise anti-dumping tariffs applied to Australian wine by China.
Faced with a 169.3 per cent tariff on wine sold to China, Treasury said it would reallocate its Penfolds Bin and Icon Range from China to other “key luxury growth markets where there is unsatisfied demand, including Asian markets outside of China, Australia, the US, and Europe.”
The company also said it would accelerate investment and sales and marketing resources to drive this reallocation to other markets and divert luxury grapes to other premium wine brands in the portfolio like Wynns, Wolf Blass and Pepperjack, “which have been significantly supply constrained over recent years.”
No doubt the Nats’ perma-handout racket will prevail.
