China imposes informal ban on Australian lobster imports in November 2020.
Context
Under the terms of the 2015 China-Australia Free Trade Agreement, tariffs were completely removed for Australian lobster exports to China, and in 2018-19 around 94% of Australian rock lobster exports were sent to the Chinese market. In November 2020, reports began to emerge that tonnes of Australian lobsters were stuck at Chinese customs facilities awaiting inspection. Chinese officials reportedly claimed to be checking for trace elements of metals and minerals in these exports.
This unofficial ban ultimately prevented Australian lobster exportrs from obtaining permits to export live lobsters to China. Foreign spokesperson Wang Wenbin claimed that the new customs procedures were due to food safety concerns. However, this mechanism came during a major period of political tension between Canberra and Beijing, exacerbated by Australia’s calls for an investigation into the origins of the COVID-19 pandemic.
Impact
In 2019, Australia’s rock lobster exports were worth around AU$700 million, with around 90% going to China.
Media reports in 2021 also claimed that Australian lobster exports to China had continued after the unofficial ban – in the form of so-called “grey trade” through intermediaries in Hong Kong, Taiwan, and along the Vietnam-China border.
The measure is reported to have had a major negative impact on Australia’s rock lobster industry, with demand and prices plunging.
Responses
(i) Australian Industry Responses
Seafood Industry Australia (SIA) stated that domestic consumption of lobster had surged in late 2020 in response to the measures, with an increase in domestic sales of 30% in December 2020 compared to the previous year. The head of SIA, Veronica Papacosta, told press that “[w]e called on the (Australian) community to support us and switch one meal on the Christmas table to Australian seafood, and we are beyond thrilled to report they did just that”.
(ii) Australian Government Responses
Then Australian agriculture minister, David Littleproud, invoked WTO rules in his response to this Weaponised Trade mechanism, telling press that Australia is “a fair country, we play by WTO rules and we expect those we trade with to do that”, and that “[w]e expect China to play by WTO rules and if they don’t we’ll have to make consideration with industry around what our next action is around the independent umpire.” At the same time, Australian foreign minister Marise Payne publicly responded, stating that “I would also urge the authorities to address the concerns of industries like the seafood industry so that their produce is able to enter in an appropriate manner without disruption”, and also referring to her expectation that Australia-China trade “be undertaken consistent with WTO obligations and that has been our least expectation.”
(iii) Third Party Responses
Reports suggest that Southeast Asian states sensed an opportunity to fill Chinese appetite for lobster – with those such as Thailand and Indonesia attempting to expand their exports. US lobster farmers reportedly successfully increased their market share –from 2.9% in 2019 to almost 16% in 2023.
Status
In November 2023 Chinese state media claimed that these measures were among those likely to be relaxed in the near future – citing “industry sources”. The same media report quoted Fan Xubing, a director of the China Aquatic Products Processing and Marketing Alliance, as saying that “[t]he resumption of Australian lobster imports is likely to happen soon, possibly by the end of this year, as relevant work is already in progress”.
In early December 2024, a journalist asked the spokesman of the Chinese Ministry of Commerce when China would lift the ban on Australian lobster imports. Interestingly, the spokesman did not deny the existence of such a ‘ban’. Rather, he said that Chinese government was still getting touch with the Australian government in relation to the issue.
On 20 December 2024, China officially resumed live rock lobster imports from Australia. This marked the final removal of informal trade barriers implemented after a rift in the China-Australia bilateral relationship since 2020.
References & Further Information
Cockburn, G. 2021. “Cheap lobsters due to Chinese tariffs prompt surge in domestic seafood consumption.” News.com.au. January 7. Available at: https://www.news. com.au/finance/business/other-industries/cheap-lobsters-due-to-chinese-tariffs-prompt-surge-in-domestic-seafood-consumption/news-story/9b935e584e5fdddfdee62a068736b022
Dalzell, S., J. Snape and T. de Landgrafft. 2020. “Tonnes of Australian lobsters stuck in Chinese airports amid trade tensions.” ABC News. Available at: https://www.abc.net. au/news/2020-11-02/australian-lobster-exports-caught-in-china-trade-tensions/12837700
Johnson, P. 2024. “China expected to lift trade ban on Australian lobster imports shortly, says Trade and Tourism Minister Don Farrell.” ABC News. June 18. Available at: https://www.abc.net.au/news/2024-06-18/china-close-to-lifting-lobster-trade-embargo/103993778
Ministry of Commerce of the PRC. 2024. ‘The Ministry of Commerce held a regular press conference on 12 December 2024’ [2024年12月12日商务部召开例行新闻发布会]. 12 December. Available at: https://www.mofcom.gov.cn/xwfbzt/2024/swbzklxxwfbh2024n12y12r/index.html
Mercer, P. 2021. “Australian Lobster Producers Find Unofficial Routes into Restricted Chinese Market.” VOA. November 3. Available at: https://www.voanews.com/a/ australian-lobster-producers-find-unofficial-routes-into-restricted-chinese-market-/6297919.html
Needham, K. and G. Crossley. 2020. “Australian lobster, timber halted by Chinese customs checks, fuels trade dispute concerns.” Reuters. November 2. Available at: https://www.reuters.com/article/world/asia-pacific/australian-lobster-timber-halted-by-chinese-customs-checks-fuels-trade-dispute-idUSKBN27I10P
Sgueglia, G. 2024. “China Resumes Live Rock Lobster Imports from Australia”, China Briefing. December 27. Available at: https://www.china-briefing.com/news/china-resumes-live-rock-lobster-imports-from-australia-december-20-2024/#:~:text=China%20has%20resumed%20live%20rock,broader%20easing%20of%20trade%20tensions.
Piovesan, A. 2020. “Foreign Minister says China trade issues a concern for Australian government.” News.com.au. November 4. Available at: https://www.news.com.au/ national/foreign-minister-says-china-trade-issues-a-concern-for-australian-government/news-story/5196f621310ac0c6ba6bddf990935b3e
SCMP. 2024. “China’s ban on Australian lobsters has Asean members clawing way into market.” Bangkok Post. January 24. Available at: https://www.bangkokpost.com/ business/general/2729869/chinas-ban-on-australian-lobsters-has-asean-members-clawing-way-into-market
Sullivan, K., S. Dziedzic, and B. Birtles. 2020. “Fears more trade bans to come as China halts imports of Australian timber, lobsters, barley.” ABC News. November 3. Available at: https://www.abc.net.au/news/2020-11-03/china-broadens-trade-war-against-australian-imports/12841142
Sullivan, K. and J. Prendergast. 2023. “Australia’s live rock lobster trade with China hoped to restart.” ABC News. February 2023. Available at: https://www.abc.net.au/ news/rural/2023-02-09/australia-live-rock-lobster-trade-china-import-licence/101952642
Thompson, B. 2024. “WA lobster worth more than $150m slips through China trade ban.” Australian Financial Review. February 12. Available at: https://www.afr.com/ policy/foreign-affairs/wa-lobster-worth-more-than-150m-slips-through-china-trade-ban-20240211-p5f3xs
Yeping, Y. 2023. “Exclusive: Australian lobsters and wine to China likely to resume as relations warm up: industry insiders.” Global Times. November 22. Available at: https://www.globaltimes.cn/page/202311/1302315.shtml
Xinhua. 2024. ‘The Ministry of Commerce of the PRC is trying to address inspection and quarantine issues of the import of Australian lobster with Australian government’ [商务部: 已在沟通解决澳龙虾输华检验检疫问题]. December 12. Available at: http://www.news.cn/world/20241212/64a92b3c946848f28c00413dad9f9d55/c.html.