Australia ‘frustrates the hell’ out of Xi Jinping with massive trade surplus

Australia ‘frustrates the hell’ out of Xi Jinping with massive trade surplus

Rising iron prices will “frustrate the hell” out of China President Xi Jinping, as Australia pushes past trade sanctions to its fourth-largest trade surplus on record.
That’s according to independent economist Saul Eslake, who said China’s trade war against Australia wasn’t having the effect it had hoped for.
Over the month of December, exports to China increased 25 per cent to $9.8 billion, according to preliminary data published by the ABS on Monday.


Iron ore accounted for 80 per cent of the exports to China, underpinning a 16 per cent increase in the value of Australia’s total monthly exports to $34.9 billion.

It drove Australia’s goods trade surplus (exports minus imports) up 18.4 per cent to $9 billion, helped along by a 9 per cent decline in imports.

Mr Eslake told The New Daily China “has no alternative” to Australian iron ore, which has so far been left out of the ongoing trade disputes.

“It’s offsetting the impact of the trade sanctions [that China is] imposing on a wide range of other [Australian goods],” he said.

China bought 11 per cent more Australian iron ore in December than in November, and paid 9 per cent more per tonne, as prices increased to more than $200 per tonne.

The double-whammy more than offset the impact of China’s sanctions on goods like barley, lobster and coal, which are widely regarded as retaliation for Australia’s foreign interference laws and human rights commentary.

The trade war has seen talks between trade officials ground to a halt over the past nine months.

Prime Minister Scott Morrison on Monday said it was unlikely he would meet Xi Jinping to discuss the relationship, unless China accepted a meeting with no policy conditions.

Although iron exports remain strong, the trade sanctions and disruptions from COVID-19 coincided with a 2.1 per cent decline in exports to China over 2020.

But businesses are diversifying, particularly in industries disrupted by China’s tactics, in what the ABS said showed a “steely resolve” among exporters.

Barley exports over the month of December increased by a record 254 per cent, as demand spiked from nations like Saudi Arabia, which bought $106 million worth.

Elsewhere, coal exports increased 26 per cent month on month to $173 million, as nations like Japan, India and South Korea increased their orders.

Coking coal exports increased 27 per cent to Japan, 38 per cent to India and 48 per cent to South Korea, while trade with nations like Saudi Arabia, Switzerland and France skyrocketed in December and annually.

Exports to Saudi Arabia shot up 154 per cent year on year to $183 million, and exports to Switzerland grew 274 per cent to $741 million.

Although both markets pale in comparison to the China trade, Export Council of Australia chair Dianne Tipping said the figures are an early sign that businesses are finding new buyers.

“COVID-19 has really highlighted the issues … with having our eggs all in one basket,” Ms Tipping told The New Daily. “So it’s exciting to see businesses start to expand the diversity of trade.”

China remains Australia’s largest and most influential trading partner, though, and broke a record of its own in December, buying $250 million worth of Australian wheat.

China had not bought any wheat for four months prior and its return to the market eclipsed monthly wheat exports to any country on record.

The ABS will publish final trade figures for December, including the services trade, on February 4.

This article was originally published on The New Daily (25/01/2021)

Supporting balance of work at home and in the office

Supporting balance of work at home and in the office

So, fast forward to 2021 and the biggest change we have seen from a recruitment perspective is that employees want to continue to “Work At Home”.

Covid-19 forced many companies to create a work at home policy and I think many with great success. Work at home does not mean or need to be 5 days a week. The majority of employees are wanting a balance of work at home and in the office to ensure the team engagement and office support continues.

Below are a few points that may make you think twice before asking your team to come into the office

Increased Demand To Work At Home

The demand for flexibility in ‘where’ and ‘how’ people work has been building for years. Prior to Covid-19, surveys repeatedly showed 80% of employees want to work from home at least some of the time. Over a third would take a pay cut in exchange for the option. While the experience of working at home during this crisis may not have been ideal as whole families were in one location, it gave people a taste of what could be.

Why Management Don’t Want Employees Working At Home

One of the biggest holdbacks of Work At Home is trust—managers simply don’t trust their people to work unsupervised. They are used to managing by counting butts-in-seats, rather than by results. That’s not managing! What’s more, seeing the back of someone’s head tells a manager nothing about whether that person is actually working. If you don’t trust an employee, why are they employed within your business at all?
If employees are given a genuine Work- Life Balance, you will see just how much happier and engaged they are without the stress of commuting, being away from loved ones, workplace interruptions, etc.

Cost Saving Opportunities Of Work At Home

Work-at-home opportunities in the past have been for the attraction and retention of employees, but during Covid-19 it was purely about saving money. Organizational leaders desperate to shed costs, found they could do more with less real estate. Studies have shown employees are not at their desk 50% to 60% of the time! That’s a huge waste of money.

Potential Impact Of Work At Home On Sustainability

One of the reasons climate change experts have a hard time getting people to change their habits is that the impact is hard to see. But even in the early days of Covid-19 we saw a dramatic reduction in traffic, congestion, and pollution. While sadly sustainability has not been a primary driver of remote work in recent years, being able to see the effects may finally flick the switch for employers and employees. The fact is, there is no easier, quicker and cheaper way to reduce your carbon footprint than by reducing commuter travel.

ECA featured member: Down Under Enterprises

ECA featured member: Down Under Enterprises

ECA Member Down Under Enterprises has been with the ECA for over five years now.

“Our business is over 90 per cent export – so we felt like we needed to be connected with ECA and the resources which ECA makes available to members,” said Phillip Prather, Head of Marketing and Operations at Down Under Enterprises.

Down Under Enterprises is an Australian family owned and operated company which grows, manufactures, markets, and exports across the globe a range of native Australian ingredients on a wholesale basis to manufacturers of products for the cosmetics/personal care, home care, pet care and other industries.

While their leading product is Tea Tree Oil, renowned globally for its antimicrobial properties, the company is also well recognised for a wide range of other Australian native ingredients like Eucalyptus, Sandalwood, Lemon Myrtle, and many more.

“Our company was founded in 2001 and until 2014, our sales were 100% export. In fact when we applied for the Export Awards that year, we listed 100% export and ECA contacted us thinking it was a typo on our submission. Our target markets have always been export oriented, to the US originally, and now across all continents and key markets globally,” Mr Prather said.

The company’s key industry verticals are cosmetics and home care products. Both of these industries are becoming more and more quality and regulatory focused.

“A significant amount of our time is spent working through product documentation, regulatory submissions, and various certifications to enable our products to be adopted by companies, especially the multi-nationals. These industries are moving towards a more regulated medical/pharma ingredient environment. What makes it even more challenging is staying up to date with each country/region’s specific requirements – and this level of regulatory scrutiny is constantly increasing,” he added.

“The most exciting thing that happned for Down Under Enterprises in 2020 was the consumer’s reactions to personal care and home care products once confronted with such a health crisis such as COVID-19.
Prior to the epidemic, some manufacturers turned a blind eye to ingredient purity and quality, as long as it gave them the ‘least cost’ option (often adulterated product). From early in the Coronavirus outbreak, we were overwhelmed by manufacturers wanting pure Tea Tree Oil for their personal care and home care cleaning products. When we quizzed them about their requirements, they often stated that it was due to overwhelming consumer demand for purity of the Tea Tree Oil – and Australian origin in particular. So in effect, when consumers’ health was really on the line, they sought out Australian grown Tea Tree Oil, spurning cheap, lowest cost alternatives.”

Tariff-ic start to 2021 for Australia’s farmers

Tariff-ic start to 2021 for Australia’s farmers

New Year’s tariff cuts build on huge benefits Free Trade Agreements have already delivered for Australia’s agricultural, food and fisheries exporters. Free Trade Agreements deliver further diversified trade opportunities for Australian exporters.

It’s a happy new year for Australian agricultural and seafood exporters, as significant tariff cuts and improved market access on a range of commodities traded across the Americas and Asia take effect.

Minister for Agriculture David Littleproud said 2021 will be a huge opportunity for our agricultural, food and fisheries exporters, with the further tariff reductions a boost to industry’s aim of achieving $100 billion in farmgate value by 2030.
Following the Indonesia-Australia Comprehensive Economic Partnership Agreement’s (IA CEPA) entry into force on 5 July 2020, more than 99 per cent of Australian goods exported to Indonesia enter duty free or under improved and preferential arrangements.
Building on this, from 1 January 2021 Tariff Rate Quotas will increase for live cattle, feed grain and citrus exports to Indonesia.
Tariffs on lamb and beef to Korea, some wine products and barley to Mexico and refined sugar to Canada will all fall in 2021, while exporters to Peru will benefit from tariff cuts on beef and sparkling wine as well as increased quotas for rice, dairy, sugar and sorghum.
On 14 January 2021 remaining tariffs for seafood exports to Vietnam will continue to drop to around 8 per cent, ahead of their complete elimination on 14 January 2022.
“The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and other Free Trade Agreements (FTAs) forged by the Australian Government were delivering for our agricultural, food and fisheries exporters.” Minister Littleproud said.
“Korea is Australia’s fourth largest agricultural partner, and Indonesia our fifth largest—the FTAs we have with these nations alone are worth billions to Australian farmers, creating jobs and supporting rural and regional communities.
“The broad range of export markets under these FTAs, along with these continued improvements with tariff reductions, will help to stimulate growth and investment, diversifying our export trade and recover from the COVID-19 pandemic.
“The total value of Australia’s exports to CPTPP economies for agricultural and food commodities was $8.4 billion in 2019-20.
“The CPTPP delivered immediate as well as ongoing tariff reductions to enhance market access across the Americas and Asia. It covers many of Australia’s key agricultural and food export commodities, including wine, beef, dairy, wheat and sugar.”

Fast Facts:

  • The CPTPP is a free trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. It entered into force for the initial ratifying countries on 30 December 2018.
  • In full implementation the CPTPP will eliminate more than 98 per cent of tariffs in a trade zone worth $13 trillion when it was signed, covering 500 million people and, providing preferential access for over $5.5 billion of Australian agricultural exports.
  • From 1 January 2021 a range of additional tariff improvements will commence, including further opportunities for expanding trade in wine, sugar, barley, beef and seafood:
– Tariffs for oranges exported to Japan will dropped by a third since the CPTPP came into force, with peak season rates lowering to 20.4 per cent.
– Mexico’s tariff for barley drops to 23 per cent (down from 115 per cent in 2018).
– Mexico’s tariff for beef drops to 15 per cent, down from 25 per cent prior to the CPTPP.
– Canada’s tariff rate for refined sugar will drop to $10.28/tonne, a third of what it was when the CPTPP entered into force.
– In addition to tariffs dropping to zero for high value wines on 1 January 2020, Mexico’s tariff on other wines will drop from 14 per cent to 12 per cent.
– On 14 January 2021 remaining tariffs for seafood exports to Vietnam will continue to drop to around 8 per cent, ahead of their complete elimination on 14 January 2022.
  • The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) entered into force on 5 July 2020. More than 99 per cent of Australian goods exported to Indonesia now enter duty free or under improved and preferential arrangements.
  • From 1 January 2021, Australian exporters gain access to further expanded Tariff Rate Quotas for live cattle, feed grain and citrus.
– Live cattle from 575,000 head – to 598,000 head.
– Feed grain from 500,000 tonnes – to 525,250 tonnes.
– Oranges from 10,000 tonnes – to 10,500 tonnes.
– Lemons and limes from 5,000 tonnes – to 5,125 tonnes.
  • The Peru-Australia Free Trade Agreement (PAFTA) came into force on 11 February 2020. PAFTA delivered immediate tariff eliminations to key agricultural commodities such as wheat, seafood, sheep meat, most wines, kangaroo meat, almonds, most horticultural goods, and most pork goods.
  • In full implementation PAFTA will eliminate more than 99 per cent of tariffs in South America’s fifth largest economy, worth $226 billion, representing 32.5 million people.
  • On 1 January 2021 the second round of PAFTA tariff cuts will come into effect:
– Beef tariffs will reduce to 10.2 per cent for beef carcasses, down from 13.6 per cent in 2020, and 6.6 per cent for cut beef, down from 8.8 per cent in 2020.
– Sparkling wine tariff reduced to 5.4 per cent down from 7.2 per cent in 2020.
  • The Korea-Australia Free Trade Agreement (KAFTA) entered into force on 12 December 2014. Trade with Korea has remained strong despite the challenges of COVID-19, with growth in horticulture exports including table grapes (199 per cent increase on last season to $43.8m and citrus (93 per cent increase on last season to $10.9m).
  • On 1 January 2021 the 8th round of KAFTA tariff cuts come into effect, delivering benefits across a range of agricultural commodities.
– Beef tariffs will fall from 21.3 per cent to 18.6 per cent with the beef safeguard increasing to 174,087 tonnes.
– Lamb tariffs will fall from 6.7 per cent to 4.5 per cent.
– The duty-free quota for malt barley will increase from 11,262 tonnes to 11,487 tonnes, with a reduction in the out-of-quota tariff from 273.6 per cent to 239.4 per cent.