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More Trade Tensions Between China and Australia

Phil Mercer

   SYDNEY - China appearsto have escalated a trade dispute with Australia.
   Australia'scotton industrysaysChinese mills are being told not to
   process Australian imports. The reported actionfollows restrictions in
   China on Australian coal and other agricultural commodities.

   Australia's cotton industry is worth about $565 million annually. China
   is by far its biggest customer, but there are concerns cotton growers
   are the latest victims of a simmering trade war.

   Chinese mills have reportedly been told nottobuyAustralian cotton, and
   industry representatives fear thatexportsto China could
   faceBeijing-imposedtariffs as high as 40 percent, which would likely
   make the trade unviable.

   To add to the frustration, cotton producers are beginning to plant for
   what is forecast to be a large crop after a long drought in Australia.

   Adam Kay is the chief executiveofCotton Australia, a leading trade
   organization. He believes the ban on Australian imports into China is
   widespread.

   "Most of the mills we have spoken to have been impacted. So, you know,
   it is concerning for us because something like 65 percent of our
   Australian crop does go to Chinaat the momentand it has been a really
   mutually beneficial relationship and to have that jeopardized is a real
   worry,"Kay said.

   The Australian government is urgently trying to clarify the situation,
   although government ministers have said extracting information from
   their Chinese counterparts is hard.

   Bilateral ties have soured in recent years. In 2017, Australian
   intelligence agents warned of growing Chinese attempts to
   influenceAustraliandomestic politics. A year later, Australia
   bannedtheChinese technology company Huawei from its 5G
   telecommunications network because of national security fears. This
   year, Australia's call for a global investigation into the origins of
   the new coronavirus, which was first detected in China, provoked more
   anger from Beijing.

   No-one is quite sure where all this leaves Australia's relationship
   with its biggest trading partner, but the trade disputesappearto be
   intensifying.

   China has reportedly banned some imports of Australian coal, and has
   imposed restrictions on barleyandmeat,and launched an anti-dumping
   investigation into Australian wine imports. China has also warned
   students and tourists not to visit Australiabecause ofallegations of
   racism.

   Beijing has also been agitated by Canberra's close military ties with
   the United States, and analysts have said Australia needs deft and
   delicate diplomacy to protect its pivotal trading relationship with
   China.

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