Australia demands China remove curbs to return trade to 'normal'

Beijing should lift remaining import tariffs, Tim Ayres has told CNBC

Canberra’s trade ties with Beijing could return to normal if China removes restrictions it still has in place, Australia’s assistant minister for trade Tim Ayres has said. The sides are currently in talks over the issue, with Beijing having lifted tariffs on Australian barley imports earlier this month.

Tensions between the two countries have been growing since 2018, after Canberra banned Chinese vendors from its 5G rollout and blocked Chinese investment, citing national security grounds. The situation worsened in 2020 when Australia called for an international inquiry into the origins of the coronavirus outbreak. This triggered reprisals by Beijing, including anti-dumping duties on Australian wine and barley.

“That is a good outcome, but I want to see –and the Australian government wants to see– trade with China return to normal and to be stabilized across the board,” Ayres told CNBC on the sidelines of the B20 summit in New Delhi over the weekend. “Until we remove all of those impediments, it’s not possible to say that trade is back to normal,” he stated.

In 2020, Beijing gradually slapped import tariffs on some Australian goods, ranging from wine and red meat to lobsters and timber. Tariffs on Australian barley have been hiked by 80.5%, wiping out bilateral trade previously worth nearly $1 billion a year. In April, Australia agreed to “temporarily suspend” its World Trade Organization complaint against China and earlier this month Beijing lifted tariffs on Australian barley imports.

Now Canberra wants Beijing to drop tariffs on Australian wine imports that were introduced in March 2021, Ayres said.

READ MORE: China accuses Australia of ‘economic coercion’ amid escalating tensions

“It’s certainly not in the interests of Chinese business for these impediments to continue to be placed in front of a range of imports into China,” he said, adding “What business needs to see is confidence in the rules-based approach to trade,” and that the meeting ahead was “an opportunity to underscore the requirement for further progress.” 

The two countries in the Asia-Pacific have also seen tensions grow due to a range of other issues, including Taiwan, their trade dispute over coal exports, and Canberra’s trilateral AUKUS defense pact with the US and UK, which allows Australia obtain nuclear-powered submarines.

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