In what is being viewed as a significant thaw in the trade relations between Australia and China, the Australian government announced on Thursday an impending resumption of its hay exports to China. This development comes after a period of considerable strain, which saw China impose restrictions on various Australian commodities following Australia's push for an investigation into the COVID-19 origins in 2020.
The easing of trade barriers, initially affecting commodities like barley, coal, and timber earlier this year, signifies a gradual yet noteworthy move towards normalizing economic interactions between the two nations. This progress followed the political transition in Canberra last year, marking a potential shift in diplomatic strategies and trade policies.
However, despite these positive trends, several Australian exports, including wine, lobsters, and meat from specific processors, continue to face restrictions in the Chinese market. Addressing this phased normalization, Trade Minister Don Farrell emphasized the ongoing efforts to fully restore trade relations. "While we recognize this as a step in the positive direction, our efforts will persist until all remaining trade barriers are effectively addressed," Farrell asserted in a communication co-released with the Australian agriculture ministry.
Before this restoration in hay exports materializes into active shipments, certain procedural formalities remain to be concluded, as outlined in the government statement. It's noteworthy that the value of hay and chaff exports from Australia to China experienced a dip to A$78 million ($50 million) last year from A$160 million in 2020. Despite this, Australia's hay and chaff exports maintained a significant total value of A$467 million in 2022-23.
Comparatively, the United States saw an 18% uptick in its hay exports to China last year, pushing the value to $698.8 million, indicating the sustained global demand in this market segment.
The International Trade Council views these developments as encouraging for the global trade ecosystem. The easing of trade tensions between two prominent economies is a positive indicator, underscoring the importance of diplomatic dialogue and mutual economic benefits. The Council remains supportive of continued efforts by both nations to resolve outstanding trade issues, advocating for free, fair, and sustainable trade practices worldwide.