Anthony Albanese urged by BCA not to visit China till sanctions go

The Business Council’s top China expert says Anthony Albanese should not visit Beijing until the coercive trade sanctions against Australian exports are removed.

Foreign Minister Penny Wong says it’s in the interests of China and Australia ‘for these trade impediments to be removed’. Picture: AFP

The Business Council of Australia’s top China expert says Anthony Albanese should not visit Beijing until the coercive trade sanctions against Australian exports are removed.

Warwick Smith, the BCA international engagement and security committee chair, said the discriminatory practices, including crippling tariffs on barley and wine, were “an endless point of contention that has to be addressed”.

The Australian has revealed the series of formal and informal sanctions from 2020, which also hit goods such as coal, cotton, beef and timber, have had virtually zero effect on our economy, according to a Productivity Commission report that found exporters had been able to find alternative customers.

Mr Smith said the PC analysis “shows the Chinese approach was a political own-goal”.

“It did nothing but destroy a good relationship on trade … that we are now in the process of rebuilding and stabilising,” he said.

Foreign Minister Penny Wong told Sky News the findings “demonstrated … the diversification in the Australian economy is underway, and that’s a good thing”. “Having said that, we obviously do believe it’s in our interest and in China’s interest for these trade impediments to be removed,” Senator Wong said.

Ahead of a potential prime ministerial trip to China later this year, Senator Wong said the government wanted “the most positive circumstances for such a visit”.

“We will work with the Chinese to enable those positive circumstances, and we’ve expressed our view about the importance, for example, of those trade impediments to continue to progress, in terms of them being lifted. We’ve had some progress … we’d like to see more.”

Mr Smith said while the broad effect of sanctions had been negligible, it was equally evident individual companies had been hugely affected, and it was important not to minimise those impacts.

“We think that China was misguided. Much of it was directed by people … no longer in position in China. We’ve had a change in ambassador in Australia, and we are about to see yet another new foreign minister and we have a new commerce and trade minister on the China side. There is room for continued improvement,” he said.

Australia has agreed to suspend its actions at the World Trade Organisation against Chinese barley tariffs, after Beijing said it would conduct a three-month internal review. After a one-month extension, Chinese officials are due to report back on August 11.

Australian Grape and Wine chief executive Lee McLean said exporters in his industry continued to suffer years after China imposed additional import taxes of about 200 per cent on our wines, and he remained “cautiously optimistic” they would be reversed later this year following resolution of the barley sanctions.

Mr McLean said while other sectors had managed to find other markets, wine producers had not been easily able to replace the massive $1.5bn Chinese market, which three times as big as the next biggest markets and which had shrunk to virtually nothing.

Some wine-producing regions had been hit particularly hard, leading to a grape glut and unsustainably low prices that were putting some businesses under pressure. But Mr McLean said he would still prefer Mr Albanese to travel to Beijing.

“It’s really positive that we are seeing the engagement at a political level, that is an important thing to resolving these issues. And the Prime Minister is on record saying he wants to see those import duties removed as soon as possible,” he said. “Of course we’d like to see that he (Mr Albanese) travels to China, and think that’s a reasonable ask to remove the tariffs. We are not going to solve any problems unless we are talking.”

Roland Rajah, director of the Lowy Institute’s International Economics Program, said the lack of impact from China’s trade aggression would not necessarily deter Beijing from pursuing similar measures against Australia in future. He said the resilience of Australia’s economy and exporters showed ongoing dialogue between the countries should not be held hostage to trade relations.

“My personal view is that what this experience shows us is these sorts of issues are not the main game. There are very critical issues we need to deal with, such as detained Australians, the security environment, and trying to get co-operation in things such as climate change,” Mr Rajah said.

National Farmers Federation chief executive officer Tony Mahar said “the Chinese trade disruptions have shown how agile Australian agriculture can be when times get tough”.

“There is enormous global demand for our premium produce and we’ve seen that with other buyers stepping forward,” Mr Mahar said. “China remains a valuable market. We’ve welcomed recent engagement at the ministerial level and think continued engagement can only be helpful in restoring a strong and mutually beneficial trade partnership.”