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On 1st January 2019, China and Australia launched the fifth round of tariff cuts, pursuant to their Free Trade Agreement (ChAFTA). China cancels tariffs on a wide range of Australian agricultural products, including pork, wine, infant formula, seafood, fruits (except citrus fruits), among others. Tariffs on Australian beef, lamb, and dairy products have also been substantially reduced. As a result, the volume and value of Australia’s agricultural exports have increased; China has become Australia’s top overseas market for agriculture. From 2018 to 2019, Australian beef, lamb, dairy products, wine, seafood, and fruits are among some of the biggest winners. Other products such as Australian cheese, coffee, and low and non-alcoholic beverages have also become increasingly popular among Chinese consumers. Tariff reduction under the ChAFTA brings enormous economic benefits to Australian farmers and exporters; it also satisfies Chinese consumers’ growing demand for high quality food. Nevertheless, Australian agricultural export faces a number of challenges. This paper examines a number of legal challenges facing the Australian exports and the Chinese importers. Besides, this paper argues crippling drought has hit many parts of Australia, reducing agricultural output and incomes and causing significant distress to many rural families across the country. Although the drought has not had a noticeable impact on export in 2018 and 2019, if the situation deteriorates, it will eventually impede Australia’s export performance. Moreover, China’s economic growth is gradually slowing down, which means its market demand for import may not grow as fast as it used to be. Moreover, how to gain and maintain a competitive advantage in the Chinese market remains an ongoing battle for Australia. Despite these challenges, this research predicts a promising future for China-Australia agricultural trade. It also acknowledges that there is much work to be done in order to increase Australian agricultural products’ market share in China. |
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