Ex­porters urged to di­ver­sify in trade war

The Northern Star - Northern New South Wales Rural Weekly - - NEWS -

THE es­ca­lat­ing US-China trade war is set to leave Aus­tralia “in the worst pos­si­ble po­si­tion of any global econ­omy”, a lead­ing trade ex­pert says.

The solution, Rabobank’s Michael Ev­ery said, is for Aussie farm­ers to di­ver­sify their ex­port mar­kets now, be­fore Aus­tralia is forced to choose sides in what could likely be­come a cold war.

“The clash be­tween the US and China is not go­ing away, it’s not an aber­ra­tion … it’s go­ing to get worse,” Mr Ev­ery said.

Mr Ev­ery’s warn­ing comes af­ter Aus­tralia’s Par­lia­ment last week rat­i­fied the TPP-11 – the big­gest global trade deal in his­tory, which US Pres­i­dent Don­ald Trump walked away from – and as meet­ings con­tinue for the 16-mem­ber Re­gional Com­pre­hen­sive Eco­nomic Part­ner­ship, which in­cludes China. China is Aus­tralia’s more im­por­tant trad­ing part­ner eco­nom­i­cally, with ag ex­ports hit­ting $12 bil­lion last year, com­pared with $3.8 bil­lion to the US.

But Aus­tralia’s diplo­matic and cul­tural ties are his­tor­i­cally more aligned with the US. He said re­cent is­sues of Aus­tralian beef and wine stuck at Chi­nese ports were “a warn­ing shot”: “They can turn the tap off and stop buy­ing from you com­pletely overnight”. The US this month con­cluded a new trade deal with Canada and Mex­ico, which pre­vents ei­ther of them en­ter­ing agree­ments with a non-mar­ket econ­omy (ie. China) – a move Mr Ev­ery de­scribed as “eco­nomic war­fare dressed up as trade” that the US could try bring­ing to the Asia-Pa­cific.

“At some point, the US is go­ing to come crash­ing back into the re­gion be­cause it’s too geopo­lit­i­cally im­por­tant … the price of pro­tect­ing you is we want a new trade deal on our terms and you don’t deal with China,” he pre­dicted.

Mr Ev­ery dis­missed views of Aus­tralia ben­e­fit­ing from new trade op­por­tu­ni­ties in China, with the US cur­rently locked out, as short-ter­mist and “com­pletely naive”.

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