US vows to work with Australia to oppose China’s ‘unfair’ trade practices
The Biden administration has vowed to work with Australia to push back against China’s “unfair” trade practices, as the Morrison government seeks international support to fight Beijing’s tariffs on Australian wine.
With the US declaring it has “Australia’s back”, Guardian Australia has learned the European Union is also set to join as a third party if the dispute between Australia and China moves to the next stage at the World Trade Organization.
Trade experts say Australia stands to gain from the involvement of major players such as the EU and US, because they have larger ranks of trade litigation specialists and the wine dispute is likely to be more complicated than the barley tariff fight.
The trade minister, Dan Tehan, is set to fly from Vietnam to Japan on Wednesday as part of a two-week trip seeking to diversify Australia’s trade links amid growing tensions with China and to “champion support for a functioning global rules-based trading system”.
But it is understood Australia has not yet received any requests to join the consultations on the more recently launched challenge against China’s tariffs on Australian wine.
In both cases, China has argued the tariffs are justified by Australia “dumping” products at low cost on the Chinese market and propping up the sectors with unfair subsidies – claims Australia denies.
Over the past two weeks, Guardian Australia has made inquiries with a range of countries as to whether they are likely to join as third parties in the case over the wine tariffs.
A spokesperson for the US Trade Representative (USTR) responded that the US was “engaging with allies such as Australia on addressing China’s unfair, non-market, and anti-democratic practices that harm our workers and businesses”.
The USTR, Katherine Tai, and Tehan had committed to enhance cooperation, the spokesperson said, adding: “The United States will pursue those shared objectives through the WTO as appropriate.”
A spokesperson for the American embassy in Canberra also said the US would “work with friends and allies to push back forcefully when we see countries attempt to undermine” the rules-based international order.
“We have Australia’s back against economic coercion, and other countries do too,” the US embassy spokesperson said.
The comments may be seen as an attempt to push back at China’s bid to drive a wedge between Australia and its US ally on trade. Some analysts in Australia also believe Australia suffered collateral damage from the Trump administration’s trade tactics.
A Chinese foreign ministry spokesperson, Zhao Lijian, last week amplified claims American exporters to China had gained at the expense of Australian exporters.
Zhao said Australia was acting “as a cat’s paw” for the US, and Australians were paying for their government’s “misguided policies”.
“We will not allow any country to reap benefits from doing business with China while groundlessly accusing and smearing China and undermining China’s core interests based on ideology,” Zhao said.
Australia formally requested consultations with China on the wine tariffs late last month, a step that must occur before a WTO panel can be established to hear the dispute.
Guardian Australia understands the EU will join as a third party if the issue cannot be resolved in talks, seeking to ensure WTO rules are consistently and correctly interpreted and applied. That would not mean the EU was taking sides.
The UK said it reserved its rights “in disputes where it has a substantial interest”.
“We will be following the matter closely and look forward to seeing the parties’ submissions in due course,” a spokesperson for the Department for International Trade said.
New Zealand said it had not made a decision to join any additional disputes “at this stage” but noted it frequently joined cases.
New Zealand had joined the barley case “because it raises systemic issues of importance to the effective functioning of the multilateral rules-based trading system”, a Ministry of Foreign Affairs and Trade spokesperson said.
“The system is currently facing unprecedented pressures – not least as a result of the trade impacts of the Covid-19 pandemic.”
A source at the Japanese embassy in Canberra said Japan had joined the barley case “to engage constructively from the viewpoint of reinforcing the multilateral free trade system and facilitating peaceful resolution” of the dispute.
The source would not say whether Japan was likely to join the wine dispute, but it was “regularly exchanging views on trade issues with Australian government at various levels”.
“We see the implications of these issues are not limited to those between Australia and China; similar issues have arisen to a number of other counties including Japan,” the source at the Japanese embassy said.
“Japan also has the experience in the past of facing export restrictions by China on rare earths and requested and realised an establishment of WTO panels.”
Canada said it had been speaking on an ongoing basis with Australia to support and strengthen the rules-based trading system, and “continues to assess” whether to participate in the wine dispute. It had already joined the barley case.
“China’s trade remedy duties on Australian barley could have effects on global trade in barley, including on Canadian barley,” Global Affairs Canada said.
Singapore’s Ministry of Foreign Affairs said the trade-reliant country “attaches great importance to the rules-based multilateral trading system” and had participated as a third party in the majority of disputes brought to the WTO over the past year.
Trade experts predict the barley dispute could take two to three years to conclude, while the wine one could take even longer.
Jeffrey Wilson, the research director at the Perth USAsia Centre, said in both cases Australia would have to turn up with a complex set of legal arguments – a task that could be assisted by third parties with greater legal capacity.