Not All Bad News
Posted on Friday, November 11, 2016 - Category: In the News
The American people have spoken and made their choice. It is amazing how things can change overnight. President Elect Trump’s victory in the United States presidential election has created a little bit of a stir in Australia and around the world.
Australia has an open economy and we are heavily reliant on exports. We depend on international stability and open borders to drive our economic growth. If Mr Trump’s views, which were expressed during the election campaign are realised, then the world trade environment is in for a very bumpy ride.
The Turnbull government promised that the ratification of the Trans Pacific Partnership (TPP) would deliver valuable new markets for Australian dairy. It was an ambitious pact that would have covered nearly 40 per cent of the global economy and solidified US leadership in the Asia-Pacific.
While Mr Trump’s election win has made the ratification of the TPP less likely, it is not all bad news for Australian dairy.
In fact, this election could open Australia to new opportunities and strengthen economic ties with countries in ways we never thought possible.
The China-Australia Free Trade Agreement (ChAFTA), ratified almost a year ago is a partnership that has the potential of becoming even stronger.
Australian Dairy Farmers (ADF) lobbied hard and strong for this once-in-a-lifetime deal and was closely involved in the negotiations.
Our dairy exports to Greater China have increased 46 per cent over five years, making it our largest dairy market export by volume and value. Import values have increased by almost 65 per cent year-on-year from approximately $456 million in 2014/15 to over $750 million in 2015/16.
The first half of 2016 saw the value of Australian dairy exports double. China’s market for Australian consumer goods has become much more sophisticated, with strong sales growth from supermarket chains and convenience stores. A growing middle class of roughly 300 million people want what Australia offers. Our industry’s ability to benefit China with safe, healthy, reliable sources of quality dairy products is essential for us in the long term.
China remains the largest importer of dairy products and it is still growing. About 16 million babies are born each year in China, and with the relaxation of the one child policy, that number is projected to beyond 20 million annually in coming years.
Over the long term, ChAFTA means more jobs across the Australian dairy industry both on farm and in processing plants. It will provide our industry with the confidence it needs to invest for a strong future.
Whatever transpires from the policy direction of a new US President and administration, the Australian dairy industry and Australian Government will do everything possible to ensure any changes in direction on US trade policy does not adversely impact the gains we have won for our dairy products access to markets.
The dairy industry’s long term growth will come from our ability to bounce back and make the most of the all the opportunities that are presented.
Acting ADF President