Australian PM Morrison calls for WTO reform to punish ‘economic coercion’, in veiled reference to China trade dispute

This post was originally published on this site

“Our challenge is nothing less than to reinforce, renovate and buttress a world order that favours freedom,” he said. “Now, meeting this challenge will require an act of cooperation among like-minded countries and liberal democracies not seen for 30 years. The

merely underlines the urgent need to deepen and accelerate our shared endeavours.”

Morrison also reiterated calls for a “stronger, more independent

” and backed

’s calls for ramped-up efforts to identify the causes of the pandemic.

01:00

China-Australia tension rises as Beijing suspends high-level economic dialogue ‘indefinitely’

“It remains Australia’s firm view that understanding the cause of this pandemic has nothing to do with politics,” he said. “It’s essential for preventing the next one, for the benefit of all people everywhere.”

Morrison also said Australia supported the peace and prosperity of all countries and was open to dialogue with China “when they are ready to do so with us”.

He made his remarks during a speech at Perth USAsia Centre before departing for a whistle-stop trip to Singapore, where he will hold talks with Prime Minister Lee Hsien Loong that are expected to touch on China and the Association of Southeast Asian Nations (Asean).

Morrison is set to then fly to Cornwall for the G7-plus summit, where he will have his first face-to-face talks with Biden. He will also meet other major leaders including British Prime Minister

, Japanese Prime Minister

and South Korean President

.

But Mark McGowan – the premier of Western Australia state – criticised the tone of the prime minister’s comments and said he had put at risk Australian jobs that depended on Chinese trade.

“I wouldn’t be attacking one country in respect to that, I’d be saying if there’s a concern about tariffs, it should be a concern everywhere, not in respect of one country,” McGowan told local radio in Perth.

Shiro Armstrong, an associate professor at the Crawford School of Public Policy in Canberra, said while there was a “widespread understanding that the global trade rules are outdated”, Morrison would need less advanced economies, including China, on his side to push ahead with changes to the WTO.

“WTO reform needs broad support, if not consensus, from its membership – and the G7 club of advanced economies won’t be able to rewrite the rules alone,” Armstrong said. “The G20 can set the strategic direction for reform of the WTO given its membership of the large emerging economies and established powers.”

A general view of Cornwall’s Carbis Bay, Britain, ahead of the G7 summit. Photo: Reuters

Sino-Australian relations have undergone a serious deterioration over the past year that has seen China slap restrictions on billions of dollars of Australian exports including beef, barley and wine.

The trade moves have been viewed as an effort by Beijing to punish Canberra for last year calling for an independent international inquiry into the origins of the pandemic.

Australia has taken China to the WTO over its tariffs on barley imports and is considering further action over duties imposed on wine. Any resolution at the international trade body could take years and would only provide a “benefit” such as reduced tariffs, rather than monetary damages.

The prospects for a resolution have been further clouded by a lack of judges at the organisation’s Appellate Body, following the

.

Although certain exports such as beef and wine have been hard hit by Beijing’s trade moves, other sanctioned exports have held up better, with producers diverting goods to other markets in Asia and Latin America. Australia’s trade in Beijing-sanctioned goods to other markets rose by US$4.2 billion in annualised terms last year, compensating for most of the losses from China, according to an analysis by the Sydney-based Lowy Institute.

Record exports of Australian iron ore to China amid high prices for the commodity have also largely offset the massive slump in trade, although the Lowy Institute analysis added that the boom might not last once China shifted away from its pandemic-recovery stimulus.

Armstrong from the Crawford School of Public Policy said Australian businesses would nonetheless be concerned about a protracted trade dispute with China.

“It is correct that Australian exporters of some commodities and goods that have faced Chinese sanctions have been able to find other markets, but that has not been without cost,” he said. “There’s a reason they were selling into the Chinese market in the first place. The shifting to other markets is good news for those who have been able to, even at large cost, but many have not.”

Australian exports such as beef and wine have been hard hit by Beijing’s trade moves. Photo: Reuters

In his speech, Morrison stressed the importance of diversifying supply chains of critical materials such as rare earths, which are vital components in consumer electronics, electric cars and military hardware.

“At present the supply chain for rare earths is not diverse, a single nation currently accounts for about 85 per cent of the world’s refined rare earth productions,” Morrison said, in another reference to China.

Malcolm Davis, a senior analyst at the Australian Strategic Policy Institute, said Beijing’s use of threats and punishments had backfired and strengthened Canberra’s resolve.

“If Australia then moves to diversify its trade, and minimise the impact of Chinese displeasure, that reinforces [Beijing’s] anger: ‘Why haven’t we submitted, why don’t we know our place?’” said Davis, whose institute is partly funded by the Australian government.

“It’s this mindset which is outdated and unrealistic, that is driving this crisis – not actions by Australia. There’s an arrogant assumption on the part of the Chinese leadership that we need them more than they need us, and that we’d do anything to curry favour with Beijing.”

Chen Hong, director of the Australian Studies Centre at the state-funded East China Normal University, denied that China had engaged in economic coercion against Australia, and accused Morrison of seeking to “politicise and even weaponise the WTO”.

“The Western countries always talk about China not abiding by the rules-based order, but now we see that actually Australia is actually trying to change the international rules, the economic rules,” he said.

Recommended Video