Australia ‘carefully and closely’ watching US-China phase one purchases for signs of trade diversion

Australia’s Trade Minister Simon Birmingham told the ‘South China Morning Post’ that he is watching US-China trade flows for signs of export diversion

China last month banned beef from four Australian abattoirs, slapped an 80.5 per cent tariff on Australian barley, but stepped up American imports of the same goods

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Australian Trade Minister Simon Birmingham told the South China Morning Post in a statement on Monday that Canberra is closely watching US-China trade for signs of managed trade. Photo: Bloomberg

Published: 9:30am, 2 Jun 2020Updated: 12:56pm, 3 Jun 2020

Canberra is looking “carefully and closely” at US-China trade flows, with the inference that the phase one trade deal is causing “managed trade” that may breach World Trade Organisation protocols and damage Australia’s exports.

Trade Minister Simon Birmingham told the South China Morning Post in a statement on Monday that while “the full nature or implications of this arrangement may not be clear for some time”, Australia is on the lookout for trade diversion that could hit its own exports to China.

“Of course, if we believe the deal enters into some sort of managed trade realm that appears to be in breach of World Trade Organisation [WTO] obligations, we'll certainly look carefully and closely,” Birmingham said, raising a concern that he and other governments have voiced in the past about the controversial trade pact.

Australia’s caution may be made moot by recent events that threaten the US-China phase one trade deal. Chinese government officials have told major state-run agricultural companies to pause purchases of some American farm goods including soybeans and pork as Beijing evaluates the ongoing escalation of tensions with the US over Hong Kong, news agencies reported Monday.