Australia’s closest security ally, led by the United States, has been the main beneficiaries of Beijing’s economic coercion campaign against Canberra, a report has found.
Key points:
- UTS finds that the United States and other allies have been the biggest winners from Australia’s trade war with China
- Australian exports across 12 commodities fell $ 17.3 billion. compared to 2019, while US exports increased $ 6.3 billion.
- The report comes amid a freeze on relations between Canberra and Beijing for various reasons, including national security
More than 18 months after China started the trade war against Australia amid a series of quarrels between the two countries, the University of Technology Sydney found that it was Canberra’s partners who took up much of the veil.
The UTS Australia-China Relations Institute has released figures showing that the value of 12 Australian exports to China affected by sanctions fell by $ 12.6 billion ($ 17.3 billion) in the first nine months of this year compared to 2019.
During the same period, the value of US exports of the same commodities increased by $ 4.6 billion ($ 6.3 billion), while exports from Canada and New Zealand increased by $ 1.1 billion and $ 786 million, respectively.
The institute’s director James Laurenceson said the data showed that Australia’s pursuit of closer security ties with the United States and other Western democracies did not prevent its allies from exploiting its trade problems.
“Of course, the United States is our great security ally and strategic partner,” said Dr. Laurenceson.
“Sometimes we get very excited by US-based commentators, and in fact senior Biden officials, who say, ‘We want to stand shoulder to shoulder with Australia.’
“So strategic friends can be tough commercial rivals, and that’s exactly what we see.”
Australia bears the costs “alone”
Within months of May 2020, Australian exporters were hit by a series of crippling trade strikes from Beijing over complaints that included “taking sides in the US anti-China campaign”.
Among the industries affected by the measures were coal, barley, beef, timber, lobster and wine.
The university found that in some cases the value of the targeted trades fell to zero, while in many other cases exports were drastically reduced.
Dr. Laurenceson said the actions of the United States and other Australian allies were understandable and in the national interests of those countries.
But he said it was imperative that Australia face the cost of its own actions, which he claimed had been hidden by record prices of iron ore, the country’s largest export to China.
He said the university’s analysis had shown that despite the increasingly popular belief that Western economies were “disconnecting” from a bloc led by China, the numbers suggested otherwise.
“But what I’re proposing is that we should be very clear about what the costs are and who bears those costs – and that’s Australia and Australian producers alone.”
Trade flows ‘not coordinated’
Perth USAsia Center research director Jeffrey Wilson said any increase in sales from the US and other allies to China was random rather than coordinated.
He said companies traded with each other, not governments.
“What we have seen since China’s trade sanctions against Australia is a major shift in who is trading with whom,” said Dr. Wilson.
“And what we’re really seeing is that international commercial companies and markets are adapting to the dam between Australia and China, basically for commercial reasons.”
Dr. Wilson noted that countries that were not considered Australia’s allies, such as Russia, had also benefited from the trade dispute by increasing sales of goods such as coal, highlighting the unpredictable nature of the fallout.
He argued that a major problem was China’s refusal to follow the rules of global trade.
“It is not the role of government to tell companies who to sell to,” said Dr. Wilson.
“But it is the role of the government to enforce global rules, and so much of the discussion between Australia and the United States is on that basis.
“Australia is never asking the United States to stop selling things to other countries – our request is that we work together to ensure that China complies with a set of international rules that it has accepted … and during the for the last 18 months it has simply not felt it. apply in its dealings with Australia. “
‘No need to sell your soul’
At Pingrup, a grain-growing town 355 kilometers southeast of Perth, Doug Smith’s barley harvest is well underway.
WA expects a record barley crop of 5.3 million tonnes.
Until last year, much of the crop would have been tied to the world’s most lucrative barley market – China.
But after Beijing blacklisted Australia’s barley exports, Smith said the grain was destined for other markets that paid much less.
“Most of our barley is now entering probably the cheapest barley market in the world, which is the Saudi feed market,” Smith said.
“And right now we’re seeing a big difference between the prices we get paid as growers in WA and what the international price of feed barley actually is.
“We see a difference of about $ 140 [a tonne]. “
A few days after Secretary of Defense Peter Dutton suggested that Taiwan could be the first domino to fall in a campaign by Beijing to dominate the Indo-Pacific region, Smith said he hoped Australia could find a better balance in its relations with China.
“Other countries have shown that you do not actually have to sell your soul to do business, and I think you have to be able to negotiate something that is fair,” he said.
“I still think there is room for that.
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