May 22, 2020


Australia-China trade dispute might hurt dairy exports



With reports of Beijing's plan to widen the trade conflict by targeting other lucrative exports, such as wine and dairy, Australia has vowed to stand up to China over trade threats, The Guardian reported.


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 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 programme.


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 "anti-dumping" 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.