China-Australia Trade Tensions Ease as Lobster Exports Resume

The trade tensions between China and Australia, which resulted in a $20 billion embargo on Australian exports, have finally eased with the announcement that live lobsters can once again be exported to the Chinese market. This development was confirmed by Australian Prime Minister Anthony Albanese, following discussions with Chinese Premier Li Qiang on the sidelines of the ASEAN summit in Laos.

Prime Minister Albanese announced, “Premier Li and I agreed on a timetable to resume full lobster trade by the end of this year. This, of course, will be in time for Chinese New Year.” This announcement marks the lifting of the final block in the trade embargo that China imposed in 2020 as a political reaction to Australia’s call for an independent coronavirus inquiry.

China’s trade sanctions, which affected a wide range of Australian exports including barley, wine, timber, beef, and cotton, cited labeling and health certificate requirements for beef bans and biosecurity issues for other commodities. The bans had a profound impact on Australian industries, previously highly reliant on Chinese markets, forcing them to seek alternative markets.

Before the embargo, China was the destination for more than 90% of Australia’s rock lobster exports, which were valued at approximately $770 million. During the embargo, Australia redirected exports to markets in Hong Kong, Taiwan, and Vietnam, with some reports of black market trades.

The rollback of the trade sanctions began with the lifting of the coal ban in January 2023, followed by timber, barley, wine, and most beef exports. Trade Minister Don Farrell and Foreign Minister Penny Wong have commended Australian businesses for their efforts to diversify and advised them to continue exploring markets beyond China.

Lobster exporter Andrew Ferguson expressed relief at the resumption of trade but remained cautious about the potential market dynamics. “Whether the market is the same as where it left off, that’s the big question,” he said, indicating uncertainty about achieving previous volumes and pricing.

Efforts to resolve issues concerning two suspended beef exporters are reportedly “well-progressed” according to a spokesperson from the Australian Meat Industry Council, who anticipates a resolution soon.

The lifting of these trade bans reflects a significant improvement in China-Australia relations, which both countries hope will stabilize and grow moving forward.