Aussie farmers hopeful of Chinese trade thawing, but must look beyond one market

Amid promising signs of a thaw in trade relations, Aussie farmers have been issued a fresh warning.

Australian exporters need to be less reliant on Chinese exporters, Foreign Minister Penny Wong says, as the two countries take a major step in mending fractured trade relations.

The federal government announced on Tuesday it had paused its World Trade Organisation dispute against Beijing for imposing hefty tariffs on barley.

Exports had effectively been blocked from entering China since 2020, due to a more than 80 per cent tariff.

China will review its tariffs over the next few months, and the WTO case will resume if no agreement is reached.

Farmers are hopeful the breakthrough in the trade despite could have a domino effect on ongoing restrictions over other Australian exports.

With wine the next item on the agenda, Senator Wong – who is currently Acting Prime Minister – warned Australia could not go back to completely separating its economic and strategic relationship.

Foreign Minister Penny Wong and Trade Minister Don Farrell said Australia would pause its WTO dispute to give China time to wind back its barley tariffs. Picture: NCA NewsWire / Naomi Jellicoe

“The point is that we’re not going back to where we were 15 years ago,” she told Channel 9.

“We know that we want a more stable relationship with China. But we know we’re not going to be able to continue to separate our economic and strategic relationship.

“Australian producers – whether barley or wine – are going to have to look to diversify in new markets.”

She said if the current pathway worked for barley, it could be mirrored to wind back trading impositions on wine.

“If it works … probably the next one I’d want to look at is wine,” she said.

Senator Wong met with her Chinese counterpart Wang Yi in December. Picture: DFAT

Nikki Palun from Australian Grape and Wine said the industry was “very hopeful” that a negotiated outcome on barley, rather than direct WTO action, would “bode well”.

Either way, the industry had been working hard over that past few years to make up for the lost Chinese market – but say nothing could replace it.

“We’ve been looking quite closely at the US, and we’ve had some initial success … and also markets like Japan, UK, also Korea and early indications into India as well,” she said.

“And although we can absorb some of the wine here into the Australia domestic market, nothing can replace the Chinese market.”

China’s executive vice minister of foreign affairs, Ma Zhaoxu, will hold talks in Canberra with senior trade officials during a visit to Australia on Wednesday.

Meanwhile, Trade Minister Don Farrell is expected to visit Beijing imminently. Prime Minister Anthony Albanese is ready to accept a formal invitation.

Overnight, Chinese Foreign Minister Wang Yi said Beijing was “ready to work” with Australia.

“China and Australia are each other’s important trade and economic co-operation partners,” he said.

“Our two economies have a lot to offer each other, and such co-operation is good for both sides. To improve and ensure a sound China-Australia relationship is not only in the fundamental interest of both peoples, but also conducive to peace and development in the Asia-Pacific and beyond.”

China remains Australia’s largest trading partner, a relationship worth $300 billion last year.

Originally published as Aussie farmers hopeful of Chinese trade thawing, but must look beyond one market