China has taken Australia to the World Trade Organisation. In a complaint to the WTO, China has accused Australia of anti-competitive behaviour against its exports of railway wheels, stainless-steel sinks and wind towers. Australia had imposed duties on such products from being imported into the down under country – a move which China has not liked. The fact, however, is that China is dragging Australia to the WTO only as part of its vendetta campaign against the Scott Morrison-led government in Canberra. The said tariffs were imposed by China as long as five years ago. Why is China waking up to them only now?
China has decided to take Australia to the WTO because only recently, Canberra took similar action against China over large tariffs being slapped on Australian wine. China’s trade-ending tariffs of up to 220 per cent on Australian wine have resulted in Australia’s wine exports to China falling from $1.1 billion to $20 million since last November. Add to that, Prime Minister Scott Morrison has been upping the ante against China of late, and only recently at the crucial G7 summit, he was able to convince all members to immediately take steps to challenge China.
“It is hoped that the Australian side could take concrete measures to rectify its wrongdoings, avoid confrontational measures, and bring the two nations’ trade ties back to normal track as soon as possible,” Chinese state media quoted commerce ministry spokesman Gao Feng as saying. In response, Australian Trade Minister Dan Tehan said Australia would defend its position. “Obviously China has the right to take this action, but we will vigorously defend the duties that we have put in place,” he said.
The trade minister from the down under country also confirmed that some of the anti-dumping tariffs being targeted by China were introduced more than five years ago. ABC News Australia quoted him as saying, “Two of the measures which were put in place were put in place in 2014 and 2015, with regards to wind towers and stainless-steel sinks … the other measure was put in place in 2019, and that was the railway wheels.”
That China has decided to approach the WTO only now shows just how retaliatory it has become when it comes to dealing with Australia. Early on, China did take a few steps on its own to try and punish Australia for standing up to Chinese belligerence, but there on, Prime Minister Scott Morrison has been beating Beijing at its own game.
Since April last year, China has imposed tariffs and other trade barriers or even unofficial restrictions on a range of Australian goods like coal, barley, wine and wheat. But what China has achieved is rather minuscule. There was only a $6 billion drop in Australian exports to China, that is, a mere 4 per cent fall as against the 2019 numbers. As per the data released by Beijing’s customs agency, Australia exported goods worth $148 billion ($US114.8 billion) to China last year. This is a small decline against the record level of exports worth $154 billion ($US119.6 billion) set in 2019.
Interestingly, China’s imports from Australia rose by 49.3 per cent to $14.87 billion in April, accelerating from the 20.9per cent import growth rate recorded in the first three months as the price of iron ore surged to a record high. In contrast to rising Australian exports to China – of items as crucial as iron ore – Australian investments in China have gone down by a whopping 25 per cent over the past one year.
China’s woes are only expected to grow here on, as Australia begins hitting it where it hurts Xi Jinping the most. Beijing is annoyed and frustrated, which is why it is now dragging Australia to the World Trade Organisation for tariffs imposed by Australia years earlier.
