Easing tensions between China and Australia over trade- Oct 2023
A major development in China and Australia’s World Trade Organisation dispute has emerged in light of Albanese’s upcoming visit to Australia’s largest trading partner next week. The two countries are to suspend the long-running dispute, with Beijing undertaking an expedited review of duties in the coming five months. As such, the Australian government is confident that protection to trade will be removed, such as the removal of trade impediments placed on Australian wine producers. This trade reform is critical to the recovery of Australia’s export industry, especially the wine industry. Political tensions caused Australia to be slapped with $20bn worth of tariffs, with tariffs on Australian wine hiking up by 212%. Accordingly, the value of Australian wine exports to China decreased from over $1 billion to $12 million, harming Australia’s terms of trade.
Additionally as tensions ease, diplomatic ties have shown signs of warming under the Albanese administration with China removing tariffs on Australian barley this past August. This is a positive sign for the agricultural industry, promising future growth in the sector. In the clean energy sector, Beijing has also put forth a proposal for Australia to remove tariffs on three of their products, notably the wind towers essential for wind turbines. In response to this, the Anti-Dumping Commission’s report has put forward the recommendation for tariffs on Chinese wind towers to expire on 16 April 2024, highlighting the government’s strong support towards environmentally sustainable practices.
Another significant gesture of improving bilateral relations includes China releasing Australian journalist Cheng Lei, who had been previously detained for three years on national security charges. Ultimately, with Albanese set to visit China in early November, Australia’s trade should expect to be bolstered in light of the removal of protection.