Aussie fear Chinese takeover

Produce grower body AUSVEG, has warned that a comprehensive free trade agreement (FTA) with China had the potential to destroy Australia’s fresh vegetable industry.

AUSVEG expressed its concerns in its recent submission to the China-Australia FTA feasibility study, a submission that seems to have been largely disregarded according to AUSVEG Chairman Michael Badcock.Michael said that the Chinese vegetable industry is 100 times larger than the Australian industry and that Australian growers could find it extremely difficult to compete, unless the FTA contained significant safeguards for Australian vegetable producers.“Australian vegetable growers must meet stringent food safety and quality regulations ensuring vegetables are free of pesticides and disease and safe to eat.

These necessary requirements are important to ensure Australian consumers have access to fresh food that’s good for them,” he said.“Chinese producers on the other hand, do not face the same Quality Assurance requirements and have access to cheap labour and are often able to land fresh vegetables in our markets at significantly cheaper prices.”

Michael Badcock stated recent examples of WA export carrots and cauliflowers which have faced up to a 30% reduction in export volume in 2003-4 due to Chinese product replacement.An FTA with China will potentially open the door for a flood of cheap vegetables into Australia. “Growers are already under stress from a market dominated by only two major retail players, a removal of the 5% tariff on many vegetable products would be the straw that broke the back of many growers,” Mike said.“Surely our government wants to ensure Australians have access to fresh, flavoursome and wholesome fresh vegetables.”

AUSVEG calls on the Australian government in its FTA negotiations to protect Australia’s $6.5b horticultural industry by declaring vegetables a 'no go' zone.Regional communities will be the hardest hit if a comprehensive FTA with China proceeds.

And in NZ?

In New Zealand free trade negotiations with China were put on the fast track earlier this year after the visit by the Chinese Premier Wen Jiabao in April saying he wants the potentially lucrative deal for NZ exporters signed within two years. However, this needs to be put in context of New Zealand’s generous open doors policy for most goods, including produce. We already import about 7000 tonnes of Chinese produce, chilled and frozen, which slips seamlessly into the markets leaving little or no trail of what it actually is and who ends up with the order.Former Marlborough garlic growers will also be only too aware that their industry was virtually demolished by Chiunese garlic imports.

Before Mr Wen arrived, Prime Minister Helen Clark had downplayed the apparent lack of progress in talks which began 18 months ago and would make this country the first developed nation to sign a free-trade deal with China. Helen Clark said: “We have confirmed in our discussion that we are both looking for a comprehensive, high-quality agreement acceptable to both sides.

“We have agreed to elevate the level of negotiations to vice-minister level, which equates with deputy secretary level here, and we can see our way to moving towards conclusion within one to two years.” Trade between New Zealand and China is worth more than $5.5 billion a year, and China is New Zealand’s fourth-biggest trading partner. A free-trade deal is expected to see exports of goods and services to China grow, on average, by between $55 million and $400 million a year. While the expected increase in Chinese exports to New Zealand - by $55 million to $100 million - might seem small beer to a country with a GDP of $1.83 trillion, Mr Wen said he was keen to take China’s trade relationship with New Zealand to this new level.

Article published in December 2006 Vol 61 No 11 - Download PDF