Chips and barley wars hotting up
Written by: Ned K. on 23 May 2020
Australian farmers grow potatoes and barley which give us hot chips and beer among other products. Now both are caught up in the intensifying trade wars within the chaotic worldwide capitalist "free trade" economies. China, a major importer of barley from Australia slaps an 80% tariff on imports of barley from Australia, accusing Australia of dumping cheap barley in China to the detriment of barley producing farmers in China.
At the same time, Australian potato growers are "digging in" for an anti-dumping fight with another big power, the European Union which threatens to flood the Australian market with potatoes in the form of frozen french fries. AUSVEG, representing the potato growers, claims that the dumping of frozen french fries from European Union countries is part of the Union's assistance package to farmers worth Australian $1.08 billion.
AUSVEG estimate western Europe has about 2.6 million tonnes of excess potatoes due to the economic downturn during the Corona Virus period. Potato farmers in South Australia and the Riverina would be hit hard if the dumping of french fries goes ahead. It will also affect workers' jobs in potato processing plants which are mainly located in regional areas where full time jobs are hardest to find.
The pro-US media in Australia has made a bigger story out of the 80% tariff by China on Australian produced barley than the potential dumping of french fries from western Europe. No surprises there. The pro-US media has gone further and claimed that the 80% tariff put on barley imports from Australia is a political act in retaliation for the Morrison Government colluding with the Trump administration in the blame game on who is responsible for the Corona Virus and the Morrison Government’s demand for a so-called "independent inquiry" in to the origin of the virus.
The 80% tariff announcement was followed by a fear campaign by the media that soon there will be tariffs on imported iron ore, coal and even wine imposed by China.
Maybe that will occur, although unlikely on iron ore, as there is still a high demand for it in China.
Underlying these latest trade skirmishes is the on-going instability of the world capitalist system in its advanced but declining imperialist stage. Despite all the nice words about trade for mutual benefit between countries sprouted by China, the EU, Australia and other countries, the reality is that the biggest capitalist powers in particular act the same way. They look after the economic interests of their own ruling class first.
With respect to China this point has been hidden somewhat by the media blowing up the political motive behind China's 80% tariff on barley.
There is an arguable case that the 80% tariff on barley by China and the very recent reduction in its import of coal is to try and address its own internal economic crisis. The Corona Virus crisis caused among other things a reduction in orders of goods manufactured in China for export.
For example, "in Guangdong, a southern coastal province that alone would stand as one of Asia's top five economies, the situation is getting dire in some labor-intensive sectors that are more China's past than its future. In the dank back alleys of Dongguan, a metropolis with about as many people as New York city, small textile makers are struggling to survive. Thousands of migrant workers have already headed back to China's poorer interior" (AFR 22 May).
This situation is repeated across industrial areas of China with the AFR claiming there are 50 million more out of work since the onset of the Corona Virus and the already existing trade war with the USA.
So, no surprise really to see the Chinese try and quell rising anxiety in the population about the sluggish economy by announcing protection of farmers against barley dumping and now protection of its own coal industry ahead of imported coal.
The timing of the 80% tariff on barley and the reduction in coal imports also came on the eve of the CCP Congress within which there are competing regional and economic sectional interests, as indeed there are in political houses of the bourgeoisie in Australia.
Marx said in his essay on Free Trade words to the effect that if he was asked which he preferred - protectionism or free trade - he went for free trade because it laid bare all the contradictions of capitalism. We are seeing an example of this before our very eyes
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