China appears to be violating its trade agreement with Australia by taking “disruptive and oppressive measures” on exports from Australia, the Morrison government said.
As concerns among Australian exporters and businesses grow over the impact of the wide range of actions, trade minister Simon Birmingham told the Senate on Wednesday that all possible means of resolving disputes were on the table.
What Is China’s Stance?
The concern was echoed by Prof Rory Medcalf, head of Australia’s national security college, who said Beijing was “turning economic assets into forced hoofs” under the leadership of Xi Jinping.
Chinese authorities have suspended imports at Australia’s sixth red meat processing plant this week, as Australian wine retailers seek to gain more markets after a massive implementation of preliminary tariffs and levies.
China has defended its trade practices for technical reasons and has refused to participate in a political campaign to “identify” exports to Australia, but argues that it is up to Australia to take concrete steps that would allow for higher negotiations to resume.
The Trade Minister’s Statement
Birmingham was due to visit the Senate on Wednesday to discuss a free trade agreement between China and Australia (Chafta) after senior officials approved an order for the issuance of documents last week.
Birmingham said the Australian government was “deeply concerned about a series of trade disruptions and restrictions imposed by the Chinese government on a wide range of goods” from Australia.
The disruption has “increased dramatically in recent months”, he said. “From the point of view of the Australian government, the intended nature of the Chinese government’s measures on Australian assets raises concerns about China’s adherence to the letter and spirit of its Cafta obligations and its [World Trade Organization] obligations.”
He said Australia had raised concerns with Chinese officials in Canberra and Beijing and had spoken to the WTO commodity committee on November 25.
Of concern were barley, wine, meat and dairy products, live shipping, logs, logs, coal and cotton.
Birmingham said Chafta included a structure for regular meetings aimed at creating further dialogue between the two countries but China’s absence over the years had hampered the use of those structures.
He said Australia would “continue to raise the issue of potential or discriminatory actions against Australia” and “look at all dispute resolution mechanisms to support our suppliers and ensure they can compete effectively”, including challenges with the WTO.
Australia’s Resillience
Medcalf, an ANU professor, argued that “much of the China trauma our diplomatic and economic relations are going through at present” will be seen later on as part of Australia in building the country’s resilience.
He said many people were of the opinion that if the Australian prime minister, ministers or officials “would choose this name or that name differently” in managing Chinese relations.
However, speaking to an audience that included the head of the foreign ministry, Frances Adamson, Medcalf said the differences between the two countries were largely structural and caused by major changes in China over the past decade.
“I have a strong opinion that structurally, if it were not for this year, it would be possible,” Medcalf told the National Press Club. “That is not good news for all producers and for everyone in our economy who are most affected by this. But I think that’s true. ”
What Can Be Done?
Medcalf said there was no easy “reset” available.
“If we expect that by 2050 the Australian economy will look exactly like the current one, then we should simply focus on restructuring by all means, but we will lose our ownership of this process and oppose any government. ”
Independent Senator Rex Patrick, who launched the Cafta drafting law, said he was pleased to hear Birmingham “accept a clear pattern of China’s action in what is a compelling trade campaign”.
“Both the Coalition and Labor were unaware of negotiating a free trade agreement with the lawless state,” Patrick said.
Cafta’s attorneys noted the total value of exports to Australia and services exported to China almost doubled from $ 87bn in 2015 to $ 169bn last year.
Labor spokeswoman Madeleine King, who told Guardian Australia last week that the government should not leave Cafta, said on Wednesday the Coalition needed to do more to manage relations.
King said the labor government would work with exporters to “build relationships and protect the markets in which Australian jobs rely” and “work with other allied and affiliated countries facing China’s dynamic challenge”.
China-Australia Relations
The Morrison government has been particularly pleased with the two-way support for managing relations with China, with some borderline issues regarding voice, leadership, and the role of reluctant speakers.
Beijing has repeatedly pointed out to anti-dumping investigation into Chinese products by Australia. Last month China’s Foreign Ministry protested that Australia had violated international trade rules by blocking Chinese investment projects on “complex and baseless” security issues.
Contrary to growing tensions between the two countries, Greg Moriarty, head of the Australian defense department, on Tuesday evening accused China of acting “disruptive” and complicated on security in Australia by building military infrastructure in rival parts of the South China Sea.
