Five Eyes alliance considers sanctioning China

The members of Australia’s international intelligence network — including the US and UK — are set to team up to take on China.

Australia’s largest allies may come to its aid in its escalating trade war with China.

The Five Eyes alliance has reportedly held discussions over how to respond after Beijing added coal to a growing list of sanctions imposed on Aussie goods.

The group – made up of Australia, the US, the UK, Canada and New Zealand – has reportedly touted retaliatory trade and economic sanctions.

Mike Green, a former special assistant to ex-US president George W Bush, said the international response needed to be broader than the Five Eyes and should include NATO and the European Union.

“China’s market is so huge (that) it’s unlikely the rest of us will have, in a democratic society, the ability to completely boycott it,” he told ABC Radio.

The Five Eyes alliance, including the US, is reportedly considering sanctions against China. Picture: Drew Angerer/ Getty Images/ AFP

“The Chinese have a slight advantage there. But what we have is numbers, and we have more and more countries that are alarmed at what China is doing.”

China’s Ministry of Foreign Affairs spokesman Wang Wenbin appeared to confirm a ban on Australian coal imports on Wednesday.

“The Chinese authorities have recently taken measures against some imported Australian products in accordance with law and regulations,” he said.

“I have repeatedly heard some people from the Australian side claim to be the so-called victims, constantly accusing and attacking China by innuendo, which is completely making a countercharge, confusing right and wrong. China will never accept this.”

Prime Minister Scott Morrison said the government was yet to receive formal notification from Beijing but said it was taking the reports “very seriously”.

“If that were to be true … then that would be in direct contravention to the World Trade Organisation (WTO) rules. It would also be a complete breach of the free trade agreement,” he told Channel 7.

Agriculture Minister David Littleproud has urged Beijing to rectify the situation. He warned making an example of Australia was a “dangerous” thing to do because China needed to trade.

Scott Morrison says China’s coal ban would be a breach of WTO terms. Picture: Mick Tsikas Pool / Getty Images

“The world is watching very closely to the actions of China, not only on coal, but on other matters that they have dealt with the Australian government and Australian exporters,” he told Sky News.

The ban has sparked deep fear in the Australian coal industry, but Mr Green conceded international intervention would have been “an open question” if the dispute was simply about trade.

He said Beijing’s sanctions were part of a broader assault on Western liberalism.

“This is more than just a dispute over tariffs or intellectual property rights, in other words. It goes to the heart of what we share as values as open democracies,” he said.

“This is China using mercantilist tools to punish Australia … for exercising free speech, for exercising open and accountable government.”

A former adviser to George W. Bush says China’s trade attacks on Australia are an assault on democracy. Picture: Kevin Frayer / Getty Images

Mr Morrison insisted Australia would not be cowed into compromising its values.

“Australia will still be Australia. Our values will still be ours. We will still continue to set our laws hear about foreign investment,” he said.

“We will have a free press and parliamentarians will be able to speak freely. We have our positions on how to deal with world health issues.”

Mr Green revealed an international emergency fund was being discussed in Washington, softening the blow for farmers impacted by Chinese sanctions.

Trade Minister Simon Birmingham has also left open the option of taking China to the WTO, arguing Beijing’s sanctions were discriminatory.

Gillard government trade minister Craig Emerson encouraged the government to “cool” its public rhetoric on Beijing and work through back channels and the embassies to resolve the issue.

But he accused China of breaching WTO rules by linking the ban on coal to diplomatic tensions and called on Beijing to reaffirm its commitment to rules-based trade.

Simon Birmingham has left open the option of taking China to the WTO. Picture: NCA NewsWire / Gary Ramage

“If they don’t want to negotiate these trade barriers with Australia, if they think that they are justly based, then let’s go almost hand-in-hand to the WTO,” Dr Emerson said.

Mr Green backed the idea of a WTO complaint, saying China had been using coercive trade sanctions with impunity for more than a decade.

He claimed the US had “failed in leadership” by allowing smaller countries to stand on their own against Beijing.

“I think the Australian case is the last one that many countries will allow to happen,” he said.

“That said, we have a lot of things we have to figure out if we’re going to respond consistent with international law in our own domestic laws.”

Chinese state mouthpiece The Global Times has warned Canberra to watch for “backstabbers in its own midst”.

Relations between Australia and China are rapidly deteriorating.

In an editorial posted on Tuesday, it said other Five Eyes powers would jump at the chance to supply the trade void created by Beijing’s dispute with Canberra.

“The Five Eyes are looking at different directions based on varied interests. It is hard for the global industries to omit the Chinese market, especially as China may be the only major economy to mete out a positive economic growth this year,” it read.

“Hanging onto the Cold War mentality, the US-led anti-China clique has been promoting its decoupling campaign for years. The nations have already proved how ineffective they could be and how unrealistic the campaign was.”