No such thing as 'free' trade in today's world

No such thing as 'free' trade in today's world

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THE concept of free trade is a very positive one for export-driven countries such as Australia. But, as the saying goes, perhaps nothing in life is truly free.

Aa

THE concept of free trade is a very positive one for export-driven countries such as Australia, where locking in free trade agreements has been a core focus.

But, as the saying goes, perhaps nothing in life is truly free.

I'll be the first to acknowledge that FTAs are probably most effective when they're operating quietly in the background. It's only when something goes wrong that our trading relationships start to be questioned.

China's decision to impose tariffs of more than 80 per cent on Australian barley imports has made trade a top talking point again. There was widespread speculation that the decision was connected to Australia's push for an investigation into the origins of COVID-19. The suspension of four Australian abattoirs and rumours about coal and iron ore imports only fuelled the fire.

Related reading:Grower concern regarding export reliance on China

While Australia signed a FTA with China in 2015, our trading relationship with the world's most populous nation hasn't been without its ups and downs.

Unfortunately, trade roadblocks like that seen with barley and beef might crop up more in the future, given China has committed to buying more than $US40 billion in agricultural commodities from the United States under their new bilateral goods and services export deal. That's twice what China was importing from the US three years ago.

And just when we thought we had enough trade headaches with China, speculation is growing about the US considering protectionist measures to assist its beef sector.

We've had a FTA in place with the US since 2004, and I don't think it's unreasonable to expect that this would shelter us from rash decisions made by President Trump. Yet our hopes of avoiding any major impact seem to rest with the humble hamburger and the US's reliance on lean trim from Australia for its ground beef production.

Related reading:How US-China deal makes ag trade tougher

Looking back to the barley side of things, India is being hailed as a crucial new market for malt barley, and while this is an incredibly positive development, it is worth keeping in mind that the Indian government has not been afraid to introduce tariffs with no warning in the past - albeit on pulses rather than cereals.

Despite all the deals in place across the world to remove trade barriers, we have to remember that should certain circumstances arise, all countries will, at some point, move to protect their own economies or national interest to the detriment of others.

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