Our trade relations with China may never be the same again

China’s claims about Australian producers would be laughable if the situation wasn’t so serious, writes Ed Gannon.

Australia’s relationship with China is less of a handshake and more of a tug of war. Picture: iStock

CHINA looks like a dead loss.

That’s the only conclusion you can reach as a belligerent ruling Chinese Communist Party doubles down on its treatment of Australian agricultural imports.

Its latest effort is to extend tariffs of more than 200 per cent on Australian wine for the next five years.

Based on what? Claims Australian exporters are dumping wine into China at below the cost of production.

You know, Penfolds Grange Hermitage into absolute top-end restaurants in Shanghai and Beijing that fetches thousands of dollars a bottle. That kind of dumping.

The claim is as laughable as it is serious. Just as laughable as the Chinese claim Australian barley growers are dumping grain into Australia because of some tenuous link that non-grain farmers have received government help to fix irrigation systems in the Murray Darling Basin.

You can just see the “aha” moment in Beijing when some obedient bureaucrat found that technicality of technicalities and added one plus one to equal three.

The wine and barley sectors are now looking at the World Trade Organisation to step in and rule China’s actions as illegal.

Don’t hold your breath. WTO is code for tying up a trade dispute in red tape for years.

Our political channels are also not working.

Trade Minister Dan Tehan told The Weekly Times VirtuAg webinar last week that he had written to China about the trade disputes but held no great hope of a response.

“My hope would be that would come sooner rather than later, but at this stage there doesn’t seem like we will get a response in the near future. Which means these trade disputes, which are having a real impact, are likely to continue,” Mr Tehan said.

That hardly inspires confidence.

Even if the political thaw freezes, sectors such as the wine industry believe the China market will never be the same again.

Instead they will focus on countries such as South Korea, Taiwan and Japan, markets the wine sector confesses they have ignored as they heaped attention on the lucrative Chinese wine market.

Which you can understand, for it really was the promised land when the China-Australia free-trade agreement was signed in 2015.

And it was until last year, with exports of commodities such as beef, dairy, wine and citrus absolutely booming in terms of volume and value.

But that looks like another world now.

Meanwhile, iron ore exports from Australia continue to surge to fuel China’s building boom on the back of an exploding middle class.

A middle-class that was demanding quality Australian food. One day the channels will open up again because of that demand. But Australian exporters should have new markets by then.

With trading partners they can trust.

• Ed Gannon is Editor of The Weekly Times

@EdgannonWtn