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SYDNEY (BLOOMBERG) – China has suspended meat imports from four Australian abattoirs, fueling concerns that escalating tensions between the two nations are damaging Australia’s most important trading relationship.
The suspension will start on Tuesday (May 12), according to a statement on a customs website. The four plants make up about 35 per cent of Australian beef exports to China, according to the Australian Broadcasting Corp.
Australia has stoked tensions with China in recent weeks by calling for an independent probe into the origins of the coronavirus pandemic. Australia is also facing the looming threat of major tariffs on its barley shipments to China.
The Australian dollar dropped as much as 0.9 per cent to 64.32 US cents.
Australian Agricultural Co, the nation’s largest integrated cattle and beef producer, fell as much as 5.6 per cent, the most in 6 weeks. Elders Ltd, which helps sell and buy livestock across Australia, China, Indonesia and Vietnam, dropped as much as 6.9 per cent, the most since March 23.
The halt related to labeling and health certification requirements, Australian Trade Minister Simon Birmingham said in a statement.
The government was concerned that they “appear to be based on highly technical issues, which in some cases date back more than a year.”
“We will work with industry and authorities in both Australia and China to seek to find a solution that allows these businesses to resume their normal operations as soon as possible,” he said.
The Australian Meat Industry Council said the matter was a “trade and market access issue.”
“While not desirable, we have dealt with issues of this nature before,” chief executive officer Patrick Hutchinson said in a statement.
As the most China-dependent developed nation, Australia has a lot to lose if the relationship deteriorates.
Ties with China were damaged in 2018 when Australia passed laws aimed at negating Beijing’s influence in national affairs and barred Huawei Technologies Co from building its 5G network. A subsequent slowdown of Australian coal imports into Chinese ports was blamed on the tensions.
Australia’s call for a probe into the origins of the virus have further strained ties. Beijing has labeled calls for the investigation “politically motivated” and warning of a potential consumer boycott of Australian products.
Three facilities in Queensland, including JBS-owned abattoirs near Toowoomba and Ipswich, and Kilcoy Pastoral Co, were suspended, as well as Northern Co-operative’s abattoir in Casino, New South Wales.
JBS has been informed that the suspensions relate to a range of technical issues and the company is working with the agriculture department to understand the problems, it said in a statement.
The Dinmore beef processing facility, near Ipswich, is the biggest beef processing plant in the southern hemisphere, according to its website.
The Australian government said it’s been given until May 19 to deliver its final defense against a Chinese anti-dumping probe into the country’s exports of barley.
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