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ABC News
ABC News
foreign affairs reporter Stephen Dziedzic

Beijing invites trade minister to China, says it won't back down on 'principled' issues

Trade Minister Don Farrell will soon travel to China to try and convince Beijing to unwind trade sanctions on Australian goods after holding a virtual meeting with his Chinese counterpart this afternoon.

China's Commerce Minister Wang Wentao issued the invitation to Senator Farrell at the opening of the talks – the first time the two men have met since Labor won power and Beijing ended a freeze on all high-level political dialogue with Australian ministers.

But the commerce minister also sounded a note of caution, warning that trade disputes will not be resolved quickly, and that Beijing will not compromise on "principled" issues.

Australia has challenged Chinese tariffs on both wine and barley at the World Trade Organization (WTO), while Beijing has hit a range of other Australian goods — including coal and live lobsters — with informal barriers and blockages.

So far Australia has signalled it's unwilling to suspend or withdraw its WTO applications, despite pressure from Beijing.

A finding on the barley appeal is expected in the first quarter of 2023.

Wang Wentao used his opening remarks to invite Don Farrell to China for further discussions, saying he was "happy to extend an invitation to you to visit China at a time convenient to you".

But he also seemed to play down the prospect of any immediate breakthroughs on trade, saying that some issues would be "difficult" to resolve.

"I wish to face up to these issues, but at the same time I believe that this meeting cannot resolve all of these issues," he said.

"So I suggest that we place emphasis on building mutual trust and finding a way … to resolve these issues."

"I also believe our Australian colleagues understand that China will not make a trade off on principled issues."

Government not expecting any quick breakthrough

Don Farrell used the opening of the meeting to stress the economic complementarity between Australia and China, calling trade the "bedrock" of the bilateral relationship.

The trade minister made a brief reference to China's trade strikes, saying he wanted Chinese consumers to benefit from "high quality Australian products".

"In recent years trade has not proceeded as smoothly, and we believe that has been to the detriment of both countries," Senator Farrell said.

"I'm confident our discussion today can provide a pathway towards the restoration of unimpeded trade."

The Albanese government has been hosing down expectations of any immediate trade breakthroughs with China, although Beijing does seem to be moving to ease some barriers.

The first shipments of Australian coal to China in two and half years are expected to arrive in the country later this week after Beijing quietly lifted an informal ban.

The rock lobster industry — which was hit hard by China's trade strikes in 2020 — is also cautiously optimistic trade may be able to resume soon, after China's Consul General in Perth visited a major exporter last month.

Other Australian exports disrupted in 2020 — including timber and cotton — have continued to flow into China, but at a significantly reduced level.

Benjamin Herscovitch from the Australian National University said the meeting was "another critical step" towards dismantling trade restrictions.

"The positive atmospherics surrounding this meeting and the broader bilateral relationship suggest a further easing of trade restrictions is on the cards in the coming months," he told the ABC

But he warned it was unlikely trade flows between the two countries would normalise in the short term, and that the tariffs on barley and wine will likely "take longer to unwind."

"Despite warming bilateral ties, Beijing and Canberra are still at loggerheads on a range of pointy disputes … from human rights abuses in China to Australia's acquisition of nuclear-powered AUKUS submarines," Dr Herscovitch said.

"Overall, this meeting is likely to be the opening act of a much longer set of negotiations between Australia and China, as both sides seek to repair a relationship that remains riven by deep disagreements on a wide range of policy and political issues."

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