By Jayd Mahady
Trade growth in the South East Asia region is set to boom in the next decade, with both the meat and livestock industry, and the timber industry expecting imports and exports to increase significantly.
Trade growth potential between South East Asia and Australia is causing mixed reactions from local industries.
The meat and livestock industry says it is expecting revenue gains of as much as twenty percent in the next four years purely from Asian markets.
Aaron Iori, regional manager to South East Asia and Greater China for Meat and Livestock Australia, says economic growth is the main reason for increased trade.
“The major reasons for increases in meat consumption and exports in this region is the fact that there are a lot of emerging economies that are benefiting from very strong economic growth, which is resulting in a larger or increasing middle class,” Mr Iori says.
He says that once an emerging middle class is established, beef becomes a more viable and affordable source of protein, hence, beef imports to South East Asia are intrinsically linked to national development.
“Major emerging economies in South East Asia include places like Indonesia, Malaysia, Thailand and Vietnam which are certainly being supported by strong manufacturing industries and exports to developed countries such as Australia, Europe and America,” Mr Iori says.
He says free trade agreements, including a recent deal with Thailand, are likely to increase market cooperation between Asia and Australia.
“At the moment in China, New Zealand has a preferential tariff over Australia for sheep meat, which places us at a price disadvantage to our major competitors.
"The Meat and Livestock Industry strongly supports breaking down barriers such as these, as a way of opening up free and open trade," he says.
Contrarily, the timber industry says it will struggle with a shortage of timber, as a CSIRO report says timber is likely to run out in the Asia Pacific in 2038.
“Australia is predicted to have a population of about thirty-five million people by 2050, that’s going to require about 1.6 million new homes, so if we’re going to continue building homes, we’re going to need to source our timber from somewhere,” Mr Haroldson says.
He says Australia is reliant on Asian timber.
“We currently import about $4 billion worth of forested wood products to Australia, and we only actually export about $2 billion, which leaves a $2 billion trade deficit.
“Asia being such a close neighbour obviously fills a lot of that timber need,” he says.
International trade expert, Professor Warwick Mckibbin, says emerging markets tend to invest highly in service industries.
“If patterns in the future mimic patterns in the past, then as people become richer they buy more and more luxury type goods.
“Particularly they invest in human capital, including education, tourism, a clean environment, and medical services, which will all be big export earners for us.”
He says industry should not worry about doom and gloom reports.
“Prices will rise, and countries that are cheaper producers will be the ones that dominate the market.
“Those forecasts about what happens in thirty years time are usually wrong,” Professor Mckibbin says.
Opinions:
Have you got an opinion? Have your say: tweet to @jaydlm. All replies will be posted on this forum.