Beijing: After a year of steadily worsening relations between Beijing and Canberra, China has imposed a raft of trade measures blocking billions of dollars worth of Australian commodities to its biggest trading partner.
The restrictions targeting shipments of beef, barley, coal, lobster, wine and timber have taken on many forms. Some measures are precise, such as anti-dumping and anti-subsidy duties on barley, allowing Australia to escalate the matter to the World Trade Organization.
Others, ranging from verbal notices to bans on individual companies, are less clear-cut. On coal, for example, China hasn’t even officially acknowledged the restrictions, clouding Canberra’s path to seeking a return to business as usual. Some goods have been blocked on health and pest concerns. China, meanwhile, has repeatedly said it’s been acting in accordance with the law and international practices.
Here are the different ways China has put the brakes on Australian imports:
China verbally told power stations and steel mills to suspend Australian coal imports, according to people familiar with the matter in October, instead of putting it in writing. This creates uncertainty as to how long the halts will last and how it might affect existing long-term contracts.
This isn’t the first time China has snubbed Australian coal — it targeted imports as early as January 2019. Restrictions have ranged from a straight ban on shipments, subjecting cargoes to additional testing and customs clearance delays or via an annual quota system that limits all foreign purchases including from Down Under.
A report by China’s Global Times on Dec. 13, which has since been removed, suggested that Beijing has formalized its halt by giving utilities approval to import coal without restrictions, except from Australia.
Prime Minister Scott Morrison said if the report proved to be accurate, it would breach the free-trade agreement that China and Australia signed in 2015. China’s Foreign Ministry spokesman Wang Wenbin said the government was unaware of the situation when asked about the state media report.
China imposed anti-dumping and anti-subsidy tariffs of over 80% on Australian barley for five years starting from May. The exporter supplies about 40% of China’s overseas purchases of the grain.
Australia said Wednesday it will challenge China at the WTO over the barley duties. The dispute may take about two to three years to be resolved, but the independent umpire should recognize that the tariffs are “not underpinned by facts and evidence,” according to Trade Minister Simon Birmingham.
China called Australia’s decision regrettable and added that it will handle the matter in accordance with WTO dispute settlement procedures.
Another high-profile target of Beijing’s actions has been Australian wine. China will charge anti-dumping and anti-subsidy duties on the beverage, which could push the total amount to more than 218%. Tariffs are expected to last between four and nine months.
Trade Minister Birmingham hinted at the possibility of taking China to the WTO over wine tariffs as well, noting that the claims made by Beijing had similar criteria to those made about barley. The Chinese embassy in Canberra said concerns over China’s adherence to the free-trade agreement are “totally unfounded” and that the nation has fulfilled its obligations.
Also read: US, China shouldn’t force others to choose sides, Australian PM Morrison says
A number of reasons have been given for China’s curbs on Australian beef from major meat companies. A foreign ministry spokesman said the restrictions were to protect the health and safety of Chinese consumers amid reports of Covid-19 infections in global meatworks, and also criticized Australia’s pursuit of a probe into the origins of the coronavirus. However, he denied the two issues were linked.
Another reason given by China for suspending purchases from one producer is the discovery of prohibited drugs in beef products. Curbs have extended to other Australian companies, although China has offered no reason at all for its latest halt. Australia accounts for as much as 18% of China’s beef imports.
Australian lobster has encountered customs clearance delays due to increased import inspections for trace elements of minerals and metals, and most exporters have decided to suspend shipments to China until there’s more clarity on the process, according to an industry group.
Customs delays are particularly damaging as live lobsters are typically flown in on ice and need to be consumed within 72 hours of leaving Australia if they don’t go into holding tanks in China. The Chinese market accounted for more than 90% of Australian rock lobster exports worth A$752 million ($573 million) in 2018-19.
China banned log imports from the states of Queensland, Victoria, Tasmania and South Australia after finding pests during checks. Barley imports from Emerald Grain Australia were also prohibited from customs clearance after China said weeds were found in recent arrivals.
China’s customs called for tougher quarantine checks on all timber and barley from Australia, while Foreign Ministry spokesman Wang said China has repeatedly found biohazards in Australian timber products and they pose a “grave danger” to the domestic industry. China buys about a quarter of its overseas timber from Australia.
There are other Australian commodities in China’s cross-hairs as tensions escalate. China has told traders to stop buying products including copper ore and concentrate, sugar and cotton, according to people familiar with the situation. Wheat has also been flagged as a possible target by the Australian government forecaster Abares.
So far, iron ore and gas — two of Australia’s biggest export earners — have been spared as any import curb could unduly damage China’s own economy.-Bloomberg
Also read: China targets Australian wine, says ties have taken ‘nosedive’