The re-emergence of bilateral trade wars appear to have taken the global trading environment back decades into a bygone era. The World Trade Organisation (WTO) principles of a rules based trading system are under threat and the longer term implications for Australian agriculture are largely unknown.
United States of America President, Donald Trump, was elected to office on a platform that included a commitment to address ‘unfair’ trade practices and reduce bilateral trade deficits with China, the European Union and other major trade partners. The Trump Administration has sought to renegotiate existing trade agreements, employ US unilateral trade sanctions, and limit engagement in, and support for, WTO forums, in order to achieve these outcomes.
Australian agriculture, while potentially seeing some short term opportunities to capitalise on the situation, is likely to have longer term negative impacts as United States of America (US) trade is diverted and global trading conditions become less predictable. With the help of robust analysis on the impacts, it is hoped that the Australian agriculture sector will be able to take a leadership role in trying to bring stability back to the global trading environment.
This report identified a wide range of risks and opportunities for Australia’s agricultural interests. It found that some Australian products are likely to fare better than others, however overall the trade wars breed uncertainty – as agricultural producers, traders and buyers struggle to manage a shifting policy landscape – and uncertainty is bad for business. The longer this period of uncertainty lasts, the more commercial decisions will need to be made by Australia’s agricultural stakeholders facing the prospect of sudden and unpredictable policy changes at the global level.
This report was independently commissioned by AgriFutures Australia to better understand the top line impacts for agriculture products as a result of the trade wars. It is not a report by, or to, government but the research was designed to equip Australian agricultural exporters with information on the possible impacts of current Trump Administration, and associated retaliatory, trade measures on Australian export markets. It will be used to help Australian agricultural producers to prepare, manage and respond to possible changes in trade flows in international markets. It will also be used to inform Australian industry input on how best to ameliorate the impacts of current and possible future trade measures