Removal of Beijing Trade Sanctions Still a Priority for Australian PM

India to step into gap left by China

Australian wine (2nd R) is displayed amongst other wines at a shop in Beijing on December 23, 2020.(Noel Celis/AFP) via Getty Images)

Prime Minister Anthony Albanese has continued publicly calling for Beijing to remove the trade sanctions on Australian exports.

“What I’ve said very clearly is that I want to cooperate with China where we can, disagree where we must, but engage in Australia’s national interest. It is in Australia’s interest to be able to export without any impediments to China,” Albanese said at a press conference on Jan. 14.

The prime minister said that his government had engaged diplomatically with the Chinese communist regime since the election last year and would continue to do so.

“I had a positive meeting with President Xi at the end of last year, and Senator Wong’s visit as Foreign Minister to commemorate the 50th anniversary of Australia-PRC relations on December 21,” he said.

Australia's Prime Minister Anthony Albanese arrives at Ngurah Rai International airport in Denpasar on the Indonesian resort island of Bali on Nov. 14, 2022. (Firdia Lisnawati/POOL/AFP via Getty Images)

“We believe that it is in both our countries’ interests to continue to develop more positive relations.”

The Chinese regime’s trade coercion on Australian exports began in 2020—including wine, barley, honey, beef, lamb, wood, seafood, and coal—to punish the country for the Morrison government’s call for an inquiry into the origins of COVID-19.

Currently, the Australian government is engaged in two formal dispute proceedings with China at the World Trade Organisation over wine and barley tariffs.

Beijing Calls for WTO Trade Disputes to be Dropped

Chinese Ambassador to Australia Xiao Qian has called on the Australian government to drop the WTO disputes.

The ambassador told the Australian Financial Review on Jan. 10 that the move was a “good idea” as finding solutions on a bilateral level was easier than through the forum.

The comments from the ambassador stand in stark contrast to the Minister for Trade Don Farrell who told ABC Radio on Dec. 29 that the WTO action was the only way forward and there was no “easy, quiet way to resolve these issues.”

“We didn’t want to take the action in the first place,” Farrell said. “The previous government had sought to try and resolve the issues. They weren’t able to, and this is the only way that we can progress these issues.”

Farrell said that Australia has an unusual relationship with China in that despite the diplomatic tensions, they are currently Australia’s largest trading partner, with 2022 seeing close to $300 billion worth of trade.

“That eclipses all of our trade with the United States, with Japan, Korea, France and Britain. Our trade with China is more than all of those countries, but we have a problem with three or four products,” he said.

“They include barley, wine, meat and, of all things, crayfish. We want to resolve those issues. The signs are good; let’s be clear about that. The signs are very positive, but we haven’t made a breakthrough yet, and time will tell just how we finally resolve these outstanding issues.”

A New Competitor in the Wings

Yet China may soon find itself competing with India for Australian products after a free-trade agreement came into force in January—likely to greatly benefit Australia.

“A population of 1.4 billion people, one of the largest economies in the world, currently one of our significant trading partners. We hope that our trade deal with India gives us the opportunity to diversify our trading relationship so that we’re not relying on one large economy to sell our products into,” Farrell said.

“We’ve had a very long-standing and positive relationship with India. Of course, the prime minister is hoping to go to India early next year, and we want to build upon those good relations to ensure that we have a terrific potential new trading partner of great significance to Australia.”

As of 2022, India was Australia’s sixth-largest trading partner and its fourth-largest export market, valued at $24 billion (US$16.7 billion).

The agreement has also been welcomed in India, where it is expected to boost the economy.

Suhail Nathani, managing partner of the Economic Laws Practice, told the Times of India that the free trade deal was a win economically and strategically.

“The India-Australia ECTA is a win-win opportunity for both countries,” he said, noting that it will lower costs to the Australian consumer and provide a large market for Australian minerals, produce, and wine.

“From the Indian perspective, the relaxing of visa requirements, the opportunities for pharma and dual degree programs is unprecedented.”

He also noted that the deal would create stable, trusted supply chains amid a tough geopolitical environment.

“Trade is moving to countries with like-minded values, and neither India nor Australia can stay out of these groupings.