In the coming weeks, Australia will mark the second anniversary of its free trade agreements (FTAs) with Korea and Japan, and its first anniversary with China on December 20.
As reported by ABC Rural
(who conducted an analysis for Australia’s agricultural exports for the 2015-16 financial year based on numbers released by the Department of Foreign Affairs and Trade), both agricultural trade and two-way trade with China increased over the year, with agricultural trade up $48 million (0.5 per cent) and two-way trade up $3.3 billion, a rise of 2.34 per cent.
While two-way trade with both Japan and Korea fell sharply, there was a significant increase in agricultural exports – exports to Korea rose $339 million in value and $128 million to Japan.
Top exports to China
Over the year, the industry that has benefited the most from the Australia-China FTA has been the food processing industry, in particular edibles and food preparations such as baking powders, soups, sauces, condiments, mustards and ice cream. These exports rose 225 per cent to $966 million, rising from Australia’s 10th largest commodity in 2015 to its second largest in 2016.
Fruit and nut exports have also rose in recent years – up 154 per cent to almost $239 million. And they can only be expected to increase as most fruits and nuts will be tariff-free by 2019. China is already Australia’s leading market for citrus (with exports up 50 per cent) and wine, surpassing the US and the UK as Australia’s top wine export destination this year with a 54 per cent jump, worth more than $417 million.
Dairy exports (milk, cream, whey and yoghurt) increased $100 million, up almost 60 per cent and while beef exports also increased (14 per cent), other meat exports declined this year, falling 35 per cent – a drop of $155 million down to $285 million. Canola and cotton were also in decline this year.
The Australia-Japan FTA will remove tariffs off 97 per cent of Australian exports in the coming years. Beef is Australia’s major agricultural export to Japan, followed by cheese, wheat, woodchips and other meat – all five of which have remained at a steady rate the past year.
The only exception was woodchips, which increased 37 per cent to $404 million in value. Fruit and nuts exports represented another big increase, with a 66 per cent jump rising from the thirteenth largest export to the ninth.
Dairy and oilseed exports to Japan decreased by half this year, dairy losing $24 million in value (a 47 per cent drop), and oilseeds down $107 million to $90.9 million, a decrease by 54 per cent.
The smallest and oldest of the three Asian FTA markets, Korea represented the largest gains for Australian agricultural exports over the year, rising 12 per cent.
As with Japan, beef is the top Australian export product to Korea (worth $1.32 billion) and continued to increase in 2016, rising by 24 per cent. Other export increases included sugar, up 17 per cent to $617 million; wheat, up 15 per cent to more than $406 million; and wool, rising 57 per cent to $127 million.
The only export commodity to Korea that decreased sharply was cotton, which fell by 70 per cent.