More than 50% of Small Washington Exporters Impacted by COVID-19, According to Research Organization
COVID-19, border closures, and supply chain disruptions had a significant impact on the financial health of small businesses.
A recent study revealed that over half of small exporters in Western Australia (WA) were negatively affected by the COVID-19 pandemic.
During a parliamentary inquiry hearing on Oct. 8, Daniel Kiley, a senior research fellow at the Bankwest Curtin Economics Centre (BCEC), emphasized the risks associated with international trade for Australian businesses.
He stated, “Our research in 2020 showed that more than half of small businesses selling internationally in metropolitan Perth and regional WA experienced financial challenges due to the pandemic, border closures, and supply chain disruptions.
Chinese tariffs on Australian exports such as barley, wine, lobster, and beef also played a role in impacting trade to varying degrees across different products and sectors.”
Despite these obstacles, the agriculture sector in WA has seen a notable increase in export activities.
Kiley highlighted that in 2020, about 28% of WA small businesses’ sales were from international markets, marking a 15% increase from 2017.
Resource Sector and Net Positive Benefit from International Trade
Abebe Hailemariam, another BCEC researcher, mentioned that despite job losses in the manufacturing sector due to cheap imports from China and Asian countries, Australia has derived overall benefits from international trade.
He noted that the resource sector played a significant role in international trade, creating job opportunities in transportation and distribution through imported products.
“This balanced out the job losses in non-competitive sectors like manufacturing,” he explained.
Free Trade Agreements Boost Australia’s Export Values
Kiley also provided insights into the impact of free trade agreements (FTAs) on Australia’s exports.
“Estimates reveal that after signing FTAs, Australian exports to China increased by $275 billion, to Japan by $99 billion, and to Thailand by $57 billion compared to scenarios without FTAs,” he stated.
Therefore, he emphasized the importance for Australian businesses, of all sizes, to engage in global trade and international investment opportunities, especially given technological advancements and the increasingly global nature of trade.
Kiley also acknowledged that many small Australian businesses recognize the need to diversify into different markets to mitigate risks following the tariffs imposed by China in 2020.
“Some businesses were able to pivot and explore new markets more effectively than others,” he noted.
“For example, our studies show that barley exports swiftly transitioned to Saudi Arabia.”
While businesses tend to focus on markets offering the highest prices for their products, Kiley suggested that the government could do more to raise awareness about alternative markets among exporters.
