Australia’s free trade agreement (FTA) with China is paying big dividends for Australian seafood exporters.
Australia exported rock lobster, abalone, mussels and other seafood products worth $66.7 million to China from January to April this year.
This was more than during the whole of last year, according to an International Trade Centre (ITC) report.
Rock lobster exports – Australia’s biggest seafood export – increased nine-fold during the period to $41.8m.
The reduction in Chinese import tariffs, which came into effect in late 2015 is attributed for the spike.
The lower tariffs are making Australian seafood more competitive on Chinese markets.
This year, China further reduced tariffs on Australian seafood by 2.5%, with import tariffs on all Australian seafood to China set to fall gradually to zero by 2019.
According to the trade report, Vietnam remains the number one Asian destination for Australian seafood exports.
Vietnam imports huge quantities of Australian seafood, with a large quantity of those exports reportedly shipped across the border in lorries from north Vietnam to China.
Avoiding import duties
These shipments avoid import duties, sales tax and Chinese customs inspection and quarantine.
That means smugglers can charge lower prices on Chinese markets than importers using official channels.
Industry sources claim up to 95% of rock lobster shipped to Vietnam ends up in China through this route, Undercurrent News reports.
Australian exporters are not directly implicated – they only sell their products to the highest bidder. After that, whatever happens to the product is beyond their control, they say.
In the long term, the China-Australia FTA deal with lower tariffs should help to curb seafood smuggling in the region.
From January to April this year, Australia exported $190 million worth of seafood to Vietnam, almost three times as much as to China. However, this was 23.3% less than during the same period last year.
Meanwhile, Australia's seafood exports to Hong Kong fell 20.8% year-on-year to $40.5 million.