Australia vows to stand up to China amid reports wine and dairy exports could be targeted next
Australia has vowed to stand up to China over trade threats amid reports Beijing is planning to widen the trade dispute by targeting other lucrative exports, including wine and dairy.
Chinese officials have compiled a detailed list of goods – also including seafood, oatmeal and fruit – that could be subjected to stricter quality control checks, increased tariffs, customs delays, or the subject of state media-encouraged consumer boycotts, according to a Bloomberg News report.
Separately, China’s foreign ministry spokesman, Zhao Lijian, called on Australia to “change its course, completely give up its political manoeuvre and return to the broad consensus of the international community” after the World Health Assembly backed calls for a future review of the lessons learned from the health response to Covid-19.
The Global Times, a Chinese state media outlet, accused Australia of following in the footsteps of American hawks by pushing for a coronavirus origins inquiry. On Tuesday it quoted an unnamed Weibo user as likening Australia to a “giant kangaroo that serves as a dog of the US”.
The tensions come as Australia draws up plans to take China to the global trade umpire aiming to cancel steep new tariffs on barley imports – although Canberra will first try to seek a diplomatic resolution.
Prof James Laurenceson, the acting director of the Australia-China Relations Institute at the University of Technology Sydney, said if Beijing actually pressed ahead with further trade actions it would undermine its claims that it was not deploying economic coercion.
“Other countries would be re-evaluating their trading relationships,” he told the Guardian. “The damage to China’s reputation would be immense, far outweighing any gains it might expect from holding up milk powder, or wine imports.”
Australia’s foreign affairs minister,
Marise Payne, responded to the reports of wider actions by saying she “would be disappointed if there was any process of conflating these issues”.
“Australia will always stand firm in protecting our national interests,” she told ABC’s AM program.
Australia-China relations have a number of long-running irritants, but Canberra raised Beijing’s ire by leading international calls for an independent global investigation into the origins and handling of the coronavirus.
The souring of ties was laid bare on Tuesday when China’s embassy in Canberra rubbished claims the widespread global support for an independent review at the World Health Assembly this week vindicated Australia’s original calls.
An embassy spokesperson said such claims were “nothing but a joke”, prompting the Australian trade minister, Simon Birmingham, to rebuke the diplomatic mission for making “cheap”, “provocative” and “inappropriate” comments.
This week, China slapped an 80% tariff on Australian barley imports, alleging Australia was breaching “antidumping” regulations and subsidising the industry – claims denied by the Morrison government.
Australia’s agriculture minister, David Littleproud, said the government would press Chinese authorities to cancel the tariffs, as the World Trade Organization’s processes required 60 days of bilateral consultations before a dispute was initiated.
“If that fails, then, obviously, we will reserve our right and likely pursue an opportunity to take it to the WTO,” he told Seven’s Sunrise program on Wednesday.
China has also barred red-meat imports from four Australian abattoirs on technical regulatory grounds.
Beijing will not concede the economic measures are retaliation for Australia’s forthright pursuit of a Covid-19 inquiry but China has a track record of using trade as weapon of diplomatic coercion: South Korea, Japan and Taiwan have all faced such pressure in recent years.
China is the leading international destination for both Australian wine and dairy: annual exports grew to $754m and $564m respectively last year. Earlier on Wednesday, the Guardian reported Australian wool producers were “particularly exposed” by the threat of a further escalation in trade tensions.
The Labor opposition stepped up its calls for the Australian government to seek clarity from the United States over the impact of a recent deal between Donald Trump and Xi Jinping to increase American agricultural exports to China.
Labor’s foreign affairs spokeswoman, Penny Wong, told the ABC the government needed to “make sure that Australia, which is a good friend of the United States and a strong ally, is not disadvantaged by that agreement”.
Laurenceson, of the Australia-China Relations Institute, said the reports of Beijing assembling a list of Australian goods it could potentially target was one thing, but it was “quite another to actually implement such moves”.
“If China then started to go to wine and to dairy, any credibility China had in suggesting this was not economic coercion would vanish,” Laurenceson said.
He said the headline-grabbing diplomatic sparring had become “extraordinarily petty”, but, behind that, there was still a deep and broad trading relationship that benefited both countries.
Laurenceson pointed out the value of China’s imports from Australia in the first four months of 2020 was larger than the first four months of 2019, even with the massive economic hibernation enforced to control the Covid-19 pandemic.
An independent evaluation of the health response – to be launched at a later date – was agreed to without dissent by members of the World Health Assembly. The European Union-drafted motion attracted a wide range of cosponsors including Australia and ultimately China.
Payne said Australia would use its position on the World Health Organization’s executive board to influence the planning.
Pressed on her previous claim the WHO could not oversee a review because it was akin to “poacher and gamekeeper”, she said the body’s independent oversight and advisory committee was “an independent organisation drawn from national governments, from NGOs, from the international system with very broad experience in a range of public health areas”.
Even before the pandemic, relations between Australia and China were strained by an accumulation of issues.
These included the decision of Australia to exclude Huawei from the 5G network rollout; China’s continued incarceration of Australian pro-democracy writer Yang Hengjun; a dispute over the South China Sea; concerns over Chinese influence in Australian business, economics and politics resulting in foreign interference laws being passed in 2018; and continuing allegations of espionage.