The Australian trade minister says he wants a quick return to normal trade with China but has warned exporters not to put “all of our eggs in one basket”.
In an interview with Guardian Australia, Don Farrell was bullish about the prospect of Australia succeeding in its international challenge against Beijing’s tariffs on Australian barley, saying he thought “we would ultimately win that”.
But he said Australia had agreed to hit pause on that World Trade Organization dispute because “even a positive finding in our favour would still have meant potentially many years of disputation to resolve the issue”.
Farrell said he would travel to China within weeks to continue talks with his counterpart. “Our plan is: let’s solve our problems with China, but also let’s diversify our trading relationships,” he said on Thursday.
A new editorial in the state-run China Daily argued that trade with Australia could “regain its former momentum as long as Canberra continues its pragmatic approach toward interactions with Beijing and sees China’s development as an opportunity, rather than a threat”.
Labor and the Coalition both regard the measures Beijing rolled out in 2020 – including tariffs or bans on barley, wine, seafood, coal and timber – as a campaign of economic “coercion” aimed at forcing Australia to shift policies.
The China Daily editorial, published on Wednesday evening, linked the trade measures to the broader political environment.
It said Australia’s businesses had “suffered heavy losses in the past two years” because the previous government “had jumped on the US bandwagon to contain China and pumped hostility into bilateral ties”.
The paper said the breakthrough on the export of Australian barley to China – previously worth $1.2bn a year – “would not have happened if Australia’s current government under prime minister Anthony Albanese had not broken away from his predecessor’s anti-China stance”.
Albanese met China’s president, Xi Jinping, in Bali in November but has repeatedly said his Labor government has not made any policy concessions in talks with Australia’s largest trading partner.
Farrell also dismissed the idea of any policy shift – such as on foreign investment rules – when asked whether Australia had offered any changes to secure the review of the 80% tariffs on Australian barley.
“This wasn’t a transaction in that sense,” Farrell said, adding that the deal was strictly about the process before the international trade umpire.
“We said, ‘as a measure of goodwill we’re prepared to suspend the WTO process’. In exchange they said, ‘we will review the tariffs’.”
Farrell said he was “very hopeful” the review – lasting three to four months – would result in Australian barely returning to the Chinese market because “all of the messages coming out of China are positive”.
He said his counterpart, Wang Wentao, had told him in their virtual meeting in February: “The freeze is over and we’re moving to a warm spring.”
The WTO barley dispute panel was due to hand over its confidential final report to the Australian and Chinese governments by 31 March, and this was expected to be shared with other countries three weeks later.
Farrell refused to confirm whether Australia had received that report, but indicated he would not consider a compromise such as a halving of the 80% tariffs.
He dismissed the argument that Australia may have let China off the hook by sparing it a public, definitive ruling against the tariffs, saying the agreement would give barley producers a much quicker answer.
Farrell said Australia would resume the WTO process if the barley duties were not scrapped. He noted the Australian wine industry had been positive about the prospect of this template being used to solve the other dispute.
The minister said while he wanted all affected Australian products to return to the Chinese market “quickly”, he saw a need to avoid overreliance on one market.
Farrell cited trade agreements with the UK and India as part of the efforts to diversify trade. He said Australia and the European Union were due to hold another set of negotiations at the end of April “where we hope we’re going to get very close to finalising a free trade agreement”.
