Australia pushes trade diversification despite warmer China ties

THE Australian government is doubling down on its policy of greater trade diversification despite increasingly warm economic ties with China.

“More trade, not less, is a key part of how we build the secure and stable economic future we want,” Trade Minister Don Farrell will say in his speech to the National Press Club in Canberra on Thursday (Jun 1) marking his one-year in office.

Australia has learned “valuable lessons over the last few years”, according to excerpts of the remarks released to the media Wednesday, showing that Farrell will urge Australian businesses to push forward with their “diversification plans”.

Twelve months ago, the centre-left government “inherited a raft of fractured relationships with key trading partners”, and since then has worked hard to advance the country’s trade and investment agenda and “to diversify our trading relationships”, according to Farrell.

China is Australia’s largest trading partner but the relationship became strained and trade sanctions were placed on a range of Australian exports in 2020. Ties between Canberra and Beijing have improved since the Labor government was elected a year ago, with coal and timber shipments resuming.

Farrell told Bloomberg in an interview in Detroit on Saturday that he was hoping for an end to the barley tariffs in the coming months. The Australian government is also hopeful a similar review process could help ease restrictions on wine exports to China, although the country’s vintners have expanded in other markets since Beijing imposed the steep tariffs three years ago.

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As trade diversification is the “central plank” of the Labor government’s agenda, Australia is on the brink of finalising a free-trade agreement with the European Union, as well as negotiating a broader trade deal with India. BLOOMBERG