Washington-based president of the US-China Business Council Craig Allen calls out China moves

China’s trade actions against Australian exports were “not consistent” with its obligations under the World Trade Organisation, according to the Washington-based president of the US-China Business Council

Mr Allen said the Biden administration was currently reviewing its policies on reducing the tariffs.

China’s trade actions against Australian exports were “not consistent” with its obligations under the World Trade Organisation, according to the Washington-based president of the US-China Business Council

In an interview with The Australian Craig Allen said that the US was watching Australia’s political and trade tensions with China closely.

“What the Chinese are doing (to Australia over trade) is beyond any normal bounds.”

“It’s just not right.”

“I wish my Australian friends well, but I recognise the difficulty in the pain and economic dislocations which are being felt as a result of the political tension.”

“I am hopeful that Australian exporters are going to be able to fully access the China market as you negotiated with the World Trade Organisation.”

“The trade coercion is not consistent with WTO obligations or other fair trade norms.”

Mr Allen was referring to tariffs imposed on Australian exports of wine and barley to China as well as China’s moves to find technical faults with Australian exports of coal, timber, wheat and lobsters.

“The world is watching this bi-lateral relationship,” he said.

“The Chinese should meet all of their obligations under the WTO”

“The Chinese often tell us not to politicise problems. I would hope they take their own advice.”

Mr Allen said Australia and the US need to work together in negotiating more trade access with China.

He said the US should work with allies such as Australia, Japan and the European Union in negotiating Phase 2 of its trade deal with China which would include issues of Chinese subsidies for its products, the role of state owned enterprises, cyber security and technology policy.

“We need to look at future negotiations together,” he said.

“China is bigger than the EU, Australia, Canada and Japan all put together,” he said.

“We need to co-ordinate, and we will be effective to the extent that our coordination is effective, which is particularly true of a Phase 2 agreement.”

“Australia is a critical ally of the US,” he said.

“We need to work together effectively not only on trade policy but on every other policy across the board.”

The US and China signed Phase 1 of a trade deal last February as a first step in resolving the bitter trade war launched by the Trump administration.

It included requirements for China to buy an additional of $US200bn ($258.5bn) in goods and services from the US over a two year period, including in agriculture, energy and manufacturing, as well as open up its markets in areas such as financial services.

Figures from the US this month show that China has fallen well short of its targets buying an overall 55 per cent of its agreed extra purchases.

Mr Allen said he saw no evidence that the deal had led to any displacement of Australian exports to China.

“I have not seen trade diversion in either energy or agriculture or any other market (as a result of the US-China trade deal),” he said.

“I don’t see that it has retarded imports from Australia in favour of imports from the US at all.”

US figures show that China has stepped up its purchases of agricultural products such as soybeans but has been less active in buying more energy products from the US including coal and LNG.

His comments come as Australian Bureau of Statistics figures show continued strong trade in Australian goods with China in December.

Mr Allen said all parties in the China trade relationship including Australia and the US needed to work out “how to make it work the best than we can.”

Mr Allen said China’s trade surpluses with the world were “their largest multilateral trade surpluses ever”, which he said was “completely unacceptable and unsustainable over time.”

“Now is a good time for them to further open up their markets.”

Mr Allen said the new Biden administration in Washington was committed to sticking with the Trump trade deal.

He said that the next step would be for both sides to negotiate to get rid of the extra tariffs imposed under the tit for tat trade war under the Trump administration.

But he said there was no way the Biden administration would be doing this unilaterally.

He said the best outcome would be for both sides to drop their Trump imposed extra tariffs and for the US to push ahead with a Phase 2 deal which would further open up market access for goods in China.

He said the average US tariffs on imports from China had gone up from three per cent before the trade war to 19 per cent today, while the average tariff on the much smaller amount of US exports to China has gone down up from six per cent to 20 per cent.

Mr Allen said the Biden administration was currently reviewing its policies on reducing the tariffs.

“I’m hopeful that the parameters are healthy for a continuation of the negotiations to get rid of the tariffs on both sides,” he said.

“But I don’t think it is feasible to take down the tariffs unilaterally without having improved market access from China.”

Mr Allen said he would like the US to rejoin the Transpacific Trade Partnership (TPP) which Australia and other nations signed up to a few years ago.

The Trump administration withdrew from the negotiations which led to countries including Australia and China signing a Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which came into force in December 2018.

“I am hopeful that America will rejoin this group with our friends and allies in Asia Pacific,” he said.

“I fear that if America does not, China’s dominance of the region will grow larger and larger and we will lose an historic opportunity.”

Mr Allen said he believed that the Biden administration would see China as a “competitive” nation, but that its policy towards China would be to work on a more multilateral basis without being “confrontational” or acting in an ad hoc way.

“It (the Biden administration) will approach China in the context or our alliance structures and multilateral institutions,” he said.

Mr Allen said the key appointees of the Biden administration were all “principled” but also very experienced and pragmatic.

“They walk into the office with a great deal of knowledge and practice about China.

“None of them are naïve,” he said.

“None of them need on the job training. They’re ready to go.”

He said the Biden team would not be looking at its ties with China “in a transactional manner,” but in a “long term, geopolitical manner.”

He said it would be approaching China in a more multilateral manner in conjunction with its allies including Australia, Japan and the European Union.

“The Trump administration was somewhat contemptuous of multilateral institutions,” he said.

“The first thing that Joe Biden did was to rejoin the World Health Organisation and sign the Paris climate change accords.”

He said the Biden administration would also be less confrontational in its attitude towards China.

“The Trump administration did not shy away from confrontation,” he said.

“This group is going to be competitive but it’s not going to seek out that confrontation.

“I don’t think we are going to see the ad hoc lashing out (which we saw under the Trump administration).”

“Rather I think we are going to see a much more measured, strategic approach to China which will be in full consultation with our alliance partners and more in accordance with international norms and institutions.”