Trade disputes between Australia and China in 2020

SINGAPORE – China is Australia’s largest trading partner and a top export destination.

Australia is one of the few developed nations on Earth that exports more to China than imports from China. In fiscal year 2018-2019, China accounted for about 32.6% of total Australian exports – about US $ 153.2 billion ($ 116.79 billion). By far, the largest export was iron ore.

The relationship between the two countries has deteriorated since Australia backed an international inquiry into China’s handling of the coronavirus, which was first reported in the Chinese city of Wuhan. Last month, the Australian press reported that the Chinese embassy threatened the Australian government and handed over a list of alleged grievances against Canberra.

China has taken several measures this year to curb Australian imports, ranging from charging tariffs to imposing bans and restrictions. Here’s a look at the affected Australian export sectors:

In May, Beijing paid 80.5% of anti-dumping and anti-subsidy duties against Australian barley – a move that excluded Australian barley producers from the Chinese market. The Chinese trade ministry said an investigation launched in 2018 confirmed that Australia had dumped barley, which would have caused significant damage to China’s domestic industry, Reuters reported.

Australian government officials have denied the allegations and said farmers in the country are among the least subsidized among OECD countries. Canberra has also called on the World Trade Organization to mediate in the dispute. Experts expect this dispute to take some time to resolve.

China has suspended imports from six Australian beef suppliers, with the latest ban coming earlier this month, according to Australian media. For the first five bans, China has cited labeling issues and health certificates.

Local media also reported this month that Australian lamb exporters said they had failed to enter the Chinese market under Covid-19 restrictions and that the country’s exports of honey, fruit and pharmaceuticals to China were exposed. risk.

China has banned timber imports from the Australian states of Queensland, Victoria and, more recently, South Australia and Tasmania.

“Chinese customs have detected many cases of live pests in timber imported from Australia since January, such as longicorn and buprestidi beetles. These live pests, if allowed in China, will seriously endanger China’s forest production and ecological security.” , said the spokesman of the Chinese Foreign Ministry. Wang Wenbin told a news conference on November 2 following reports of a ban on log exports from Queensland.

“China has notified the Australian side of the cases and urged the Australian to investigate and take steps to prevent a recurrence,” he said.

Chinese media have said the country’s main economic planner has approved power plants to import coal without disposal restrictions, with the exception of Australia, Reuters reported. It followed previous reports that Beijing had verbally notified state utilities and steel mills to stop importing Australian coal.

Coal is the third largest export from Australia to China. But the share of coal exports to China has declined over the years, according to analysts who say Australian exporters have found additional buyers in places like South Korea, Vietnam and Japan.

Local media reports in November said tons of live lobsters were stranded at Chinese airports and clearing houses, awaiting inspection by Chinese customs officials.

The Australian Seafood Trade Advisory Group said last month that the industry had temporarily halted exports of lobster to China and was working with Chinese and Australian authorities to respond to new border inspection protocols in Beijing. The group said planning is also underway to find other lobster destinations, including Australia’s internal market.

Despite export restrictions and taxes for the above sectors, Australia’s economy remained relatively unaffected by the Beijing movements. This is probably because China has not yet imposed any restrictions on Australia’s largest export to the country: iron ore. Prices have risen to record levels in recent weeks.

Given China’s dependence on sea-borne Australian iron ore, along with its increased appetite for it due to aggressive industrial stimulus, trade in iron ore is unlikely to be significantly affected, according to analysts at National Australia Bank.

“Nearly half of all Australian exports to China are iron ore. Goods subject to tariffs or other restrictions account for a small share of global GDP, although they will have a significant sectoral and regional impact,” analysts said in a statement. -a note from December 14. .

But they warned that Australia’s education and tourism industries, which rely on Chinese students and tourists, could be affected if Beijing’s attitude towards them changes as borders reopen.