Australian and Chinese officials will meet in the coming days to discuss a relaxation of trade restrictions after Commerce Minister Wang Wentao signaled that relations are set to improve further.
(Bloomberg) — Australian and Chinese officials will meet in the coming days to discuss a relaxation of trade restrictions after Commerce Minister Wang Wentao signaled that relations are set to improve further.
The tensions “didn’t occur overnight, and they’re not going to be resolved overnight,” Trade Minister Don Farrell said in an interview with Bloomberg. “Although the minister did say to me, ‘the freeze is over and we’re now moving to a warm spring.’”
Wang made the comment to Farrell during talks on Feb. 6, the first between China and Australia’s trade ministers since 2019. Farrell also said he’s hopeful of breakthroughs on the sale of timber, wine and dairy to Chinese consumers.
Such an outcome would be a shot in the arm for Australia’s economy, given China remains its largest trading partner. It would also be a win for the eight-month old Labor administration, which has opted against megaphone diplomacy with Beijing in contrast with its center-right predecessors.
Representatives of the Chinese and Australian governments will focus on how to take the next steps in warming economic ties, Farrell said. He is expected to travel to Beijing in the coming months to meet with Wang in person.
China placed informal restrictions on the use of Australian coal in 2020, after then-Prime Minister Scott Morrison called for an international investigation into the origins of Covid-19 in Wuhan that year. The punitive trade actions extended to lucrative agricultural exports including wine, barley and lobsters.
Still, in the intervening period, Australia’s exports to China continued to grow, mainly due to a renewed surge in iron ore prices.
During his virtual meeting with Wang 10 days ago, Farrell said the commerce minister had been told that “orders would be coming through” for Australian timber products, in addition to coal shipments that have already restarted.
Farrell said he had been told separately that Australian dairy company Bulla had received its first Chinese order in a couple of years, and he was hopeful for a relaxation of high tariffs on Australian wine.
Farrell, a senator from South Australia, said that Wang had suggested his favorite wine was a South Australian red.
“Everywhere you look, the signs are positive,” he said.
India, EU FTAs
Separately, the minister will travel to India in March as part of a delegation with Prime Minister Anthony Albanese. Farrell said he will continue negotiations on a full free trade agreement between Australia and India, following up on an interim deal signed in April 2022 under the previous government.
Farrell said the “hardest parts” of the agreement were still to come, including access to India’s agricultural markets and the entry of Indian workers into Australia’s labor market. But he was hopeful he would be able to strike a deal with Minister of Commerce Piyush Goyal.
“I won’t say this year, but certainly we’ll be well down the track,” he said.
Farrell also said he was hopeful of finalizing a free trade agreement with the European Union in 2023, adding there was a “real determination” on both sides to conclude it by the end of the year.
“I’m confident that there’s goodwill on both sides there and that we’re not far off from an agreement,” he said.
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