China-Australia relations: coal, cotton curbs could violate trade rules, lawyers say
- It was reported last week that Chinese authorities had started asking importers verbally not to buy Australian coal and cotton
- The moves could violate World Trade Organization rules, as well as the China-Australia Free Trade Agreement
China’s informal verbal prohibitions on Australian imports of coal and cotton could breach rules set out by the World Trade Organization (WTO), as well as the free trade deal between the two nations, according to trade lawyers.
Directing state-owned enterprises not to trade with Australian suppliers is viewed as a de facto barrier to trade, and contravenes WTO trading rules that stop members from discriminating trade with any country.
The two nations also have the China – Australia Free Trade Agreement (ChAFTA), which came into force in December 2015.
If the Chinese government, requires all Chinese enterprises not to import coal from Australia, it essentially means imposing a zero quota on Australian coal export to China
“Currently, the facts of China’s measures are not clear. If the Chinese government requires all Chinese enterprises not to import coal from Australia, it essentially means imposing a zero quota on Australian coal exports to China. This likely violates the WTO and the China-Australia Free Trade Agreement,” University of Sydney ChAFTA expert Jeanne Huang said.