Australia’s Trade Minister, Don Farrell, has traveled to Beijing to meet with his Chinese counterpart, Wang Wentao, in an effort to restore trade relations between the two countries. Farrell expressed his intention to address the existing obstacles that hinder the flow of goods between Australia and China.
He emphasized his strong advocacy for the full resumption of unimpeded Australian exports to China, benefiting both nations.The significance of this visit lies in Australia’s endeavor to improve its ties with Beijing following a change in leadership and China’s reopening as the world’s second-largest economy.
China is Australia’s largest trading partner, with the total value of goods exchanged reaching AUD 287 billion ($192 billion) in 2022, based on Australian government statistics. Australia plays a crucial role as a major supplier of commodities, particularly iron ore, to China.
Tensions arose between the two countries in 2020 when then-Prime Minister Scott Morrison called for an international investigation into the origins of Covid-19. As a result, China imposed restrictions on various Australian products such as beef, barley, wine, and coal through heavy taxes and other barriers. This led to a 13% decline in Australian exports to China in 2022, as per Chinese customs data.
However, relations have started to improve since Anthony Albanese assumed office as prime minister in May last year. Farrell highlighted the resumption of coal, cotton, and copper trade between the two countries.
Recent data shows a significant increase in exports to China, with the value of shipments reaching a record high of AUD 19 billion ($12.8 billion) in March.
Despite these positive developments, challenges persist. The Australian foreign ministry highlighted the ongoing restrictions on the sale of Australian barley, with China imposing 80.5% duties that effectively block exports to their market. Before the dispute, barley sales to China were valued at AUD 916 million ($613 million) annually.
Australia has raised the issue with the World Trade Organization, filing a complaint in 2020. As a gesture of goodwill, Australia has currently suspended the case while awaiting an expedited review of the measures. If the duties are not lifted at the end of the review period, Australia plans to resume the dispute at the WTO.
China has expressed its willingness to move forward and work together with Australia.
