Australia open to compromise in ending WTO dispute with China

Australia’s government is open to discussing ways to avoid World Trade Organization arbitration of its trade dispute with China, amid speculation of a possible meeting between Prime Minister Anthony Albanese and President Xi Jinping.

In a speech in Melbourne on Monday, Trade Minister Don Farrell said Australia was willing to discuss “off-ramps” with the Chinese government instead of forcing a WTO decision on the current trade disputes between Canberra and Beijing. 

However the trade minister said no matter what happens at the WTO, Australian businesses were looking at “minimizing risk exposure” by diversifying away from the Chinese market.

“As we have discovered, over-reliance on any single trading partner comes with significant risks,” Farrell said in his speech. “That’s why trade diversification is the central plank of the government’s trade policy strategy.”

Australia and China have been locked in a trade dispute since 2020. Following a speech by then-Prime Minister Scott Morrison calling for an international investigation into the origins of Covid-19 in April that year, China imposed trade sanctions on a range of Australian exports including meat, coal, barley and wine.

More than two years later, the vast majority of sanctions remain in place and the Australian government has escalated their concerns to the WTO. In 2021, Canberra requested a WTO panel to examine China’s punitive sanctions on Australian barley and wine exports.

Any major warming of relations would require the restoration of full trade relations, Albanese has said. The Australian government has raised the possibility of a meeting between Albanese and Xi at the upcoming G20 summit in Bali, where the Australian leader said he would raise trade issues. 

Albanese met briefly with outgoing Chinese Premier Li Keqiang on the sidelines of the ASEAN meeting in Cambodia over the weekend, which he described as “constructive.” It was the first face-to-face meeting between an Australian leader and a top Chinese official since 2019.