‘Tis the voice of the lobster: reflections on Australia-China trade

Oct 23, 2024
Fishermen holds a crate of southern rock lobster at St Helens on Tasmania's east coast.

Exports to China were worth over $700 million in 2019. Trade barriers were imposed by China following Scott Morrison’s call for an enquiry into the origin of Covid, putting an end to direct trade in this commodity. Last week PM Albanese announced the imminent lifting of restrictions by the end of the year and credited the improvement of bilateral relations. Things however are a little more fishy.

As Lewis Carroll remarked,

“Tis the voice of the Lobster, I heard him declare

You have baked me too brown, I must sugar my hair.”

The rock or spiny lobster (different from the European or American lobster) is uniquely found in southern and western Australia and is Australia’s most valuable wild capture industry. Nationwide, lobster exports are worth around $500 million annually. Import tariffs on Australian seafood had been eliminated in 2019 following the conclusion of CHAFTA (the China Australia Free Trade Agreement) and the future looked bright for holders of lobster catch licences and their export agents. Euphoria did not last long. After Scott Morrison launched an excessively hostile attack on China in 2020, a shipment of live Australian lobsters was detained at the airport in Shanghai on suspicion that it contained the heavy metal cadmium. (These were southern rock lobsters from Tasmania, which are practically all exported to China.)

An ABC Four Corners investigation in 2020 stated that Australian authorities found no evidence of such contamination. Under the rules of the WTO (World Trade Organisation), trading partners may not discriminate against each other except in circumstances such as contamination or threat to human health. Australia lives by the mantra that it respects the international rule of law. We are a trading nation. The international trading rules are set by the WTO. Let no one think however that politics play no part. Clearly it was a political deterrent that the Chinese government restricted the import of Australian lobster. This was not the first time for China, nor are we the first victim. Similar tactics have been used against Taiwan, Lithuania, South Korea and Japan. China has also placed export bans on its own products such as semiconductors and electric vehicles to retaliate against US actions. We play the same games ourselves. It is par for the course.

According to the UN Comtrade Database, in 2019 China accounted for 83 percent of Australia’s lobster exports. By 2021 this had fallen to zero, although the same percentage was taken by Hong Kong, Taiwan and Vietnam. Hong Kong used to import around 5,000 kg of Australian rock lobster every month, but following China’s trade ban in 2020, quantities rose to hundreds of thousands of kilograms, clearly not for local consumption. In subsequent years, Hong Kong Customs seized many shipments bound for mainland ports. It seems likely that Australian lobster also entered China via Taiwan and Vietnam.

In 2020, China took punitive action against Australian coal, wine, beef, lobster and barley. In the case of barley, where a tariff of 80.5 percent was imposed on “dumping” grounds, Australia informed China that we would take the case to the WTO. This is a long and complicated process typically taking several years and at present there is a non-functioning appeals process so there was no guarantee of a win. Past experience suggested however that a negotiated settlement outside the WTO framework was likely, and that indeed occurred in August last year. One by one the skittles fell as bilateral tensions eased.

“When the sands are all dry, he is gay as a lark,

And will talk in contemptuous tones of the Shark:

But, when the tide rises and sharks are around,

His voice has a timid and tremulous sound.”

Last month PM Albanese met Chinese Premier Li Qiang in Vientiane on the sidelines of the ASEAN Summit. Reporting his agreement on lobster exports, Albanese said the barrier would be lifted before the end of the year. He added that this would also be before the Lunar New Year, which in 2025 will take place at the beginning of February. (This is a traditional time for banquets and celebratory dinners.) “It is in the interests of both our countries to continue this path of stabilising our relationship. A resumption in trade for all Australian commodities is an important part of this process,” Albanese said.

As I said earlier, things are still fishy. Across China, potential consumers of lobster are very conscious of President Xi Jinping’s crackdown on corruption. Invitations to banquets, replete with bottles of Grange and dishes of whole lobster have been conspicuous occasions of bribery and favouritism. New Year 2025 celebrations are likely to be modest. There are also new international circumstances to consider.

Australian commentators have noted that the agreement between Li Qiang and Albanese does not guarantee that export industries will not suffer disruption from international political developments, particularly when tensions continue between China and the United States and the outcome of the forthcoming US elections is far from certain.

Let us hope that Australia and China can set an example to the rest of the world and maintain our mutually advantageous bilateral trade.

Let us hope that China and the US are not like Panther and Owl, who came to a bad end.

“I passed by his garden, and marked, with one eye,

How the Owl and the Panther were sharing a pie:

The Panther took pie-crust, and gravy, and meat,

While the Owl had the dish as its share of the treat.

When the pie was all finished, the Owl, as a boon,

Was kindly permitted to pocket the spoon:

While the Panther received knife and fork with a growl,

And concluded the banquet by eating the Owl.”

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