Australia has slammed China’s coal ban as ‘unacceptable’ and a breach of the free trade agreement between the countries

The Morrison government appears to be losing patience with China’s attacks on Australian exports. (Himanshu Bhatt, NurPhoto via Getty Images)
  • The Morrison government has issued its strongest censure of China yet after it reportedly banned Australian coal.
  • Responding on Tuesday, Trade Minister Simon Birmingham suggested it was a breach of trade rules and urged the Chinese government to pick up the phone.
  • Prime Minister Scott Morrison meanwhile said the ban would breach the countries’ free trade agreement.
  • Visit Business Insider Australia’s homepage for more stories.

The Morrison government has condemned China’s latest attack Australian coal, as tensions between the two nations escalate.

Speaking to media on Tuesday, Trade Minister Simon Birmingham said the federal government “is very, very concerned” about state-owned media reports that Australian coal was now banned.

“This could constitute a breach of China’s commitments to the globe in terms of their membership of the World Trade Organisation [WTO] … as well as its commitment to Australia,” Birmingham said.

“The easiest way for China to deal with this is to simply make clear it is not true to allow trade between Australian businesses and Chinese businesses to be conducted according to the type of market principles China has agreed to engage in.”

The ban not only threatens $14 billion worth of Australian exports, but would also have “flow-on impacts” to the broader Australian economy, Birmingham said.

His comments signal growing concern from Australia as it tries to battle the combativeness of its largest trade partner.

“I can assure everyone when the Australian government makes decisions that affect other governments, we work through the proper diplomatic channels to inform those governments,” Birmingham said.

“We do so in a manner that is respectful and appropriate in terms of the nature of the dialogue that should exist between governments, and we would urge others to apply the same courtesies.”

Tensions mount

To this point, the Morrison government has been reluctant to link China’s punitive tariffs and restrictions to a souring relationship between Canberra and Beijing.

China has justified such moves as part of anti-dumping investigations into Australian wine for example, while adding increasing pressure to all kinds of markets from seafood to timber.

In November, Prime Minister Scott Morrison addressed the targeting of seven such exports by saying that “China has denied that is what they are doing and I can only take that at face value”.

Unable to turn the tide however, such diplomacy now appears to be wearing thin. Morrison on Tuesday acknowledged that the federal government has been unable to get answers out of Beijing, and described the prospect of the ban as “a bad outcome for the trading relationship”

“If that were the case, then that would obviously be in breach of WTO rules,” he said. “It would also obviously be in breach of our on free trade agreement and so we would hope that is certainly not the case.”

He promoted the fact that Japan continues to buy twice as much thermal coal as China, and went after the latter’s justification for the ban, ostensibly to lower emissions.

“It really is a lose-lose here, because Australian coal, compared to the coal that is sourced from other countries, the other countries have 50% higher emissions than Australian coal.”

Morrison denied the suggestion that he his government had mismanaged the relationship, to the detriment of the Australian economy, and doubled-down on Australia’s support the prospect of a World Health Organisation (WHO) investigation into China’s handling of the coronavirus outbreak – the speculated cause of the trade war.

“I think it is important that we work with organisations like the World Health Organisation to understand and learn lessons from global pandemic issues. I mean, these are practical, real things that any Australian government you would hope would do,” Morrison said.

But while the rhetoric on China may be beginning to change, the relationship only appears to be getting worse.