The US is one of Australia’s closest allies and says it has our back. But behind the scenes, America is benefiting greatly from our misfortune.
Australia’s devastating trade war with China has been a crushing blow to many industries and the wider economy as a whole.
And while our allies have publicly supported us, behind the scenes they have quietly taken advantage of Australia’s misfortune.
That’s according to an eye-catching new report from the Australia-China Relations Institute (ACRI), based at the University of Technology Sydney, which has detailed a series of harsh economic realities Australia is facing as a result of our feud with China.
The damning report, prepared by director James Laurenceson and project and research officer Thomas Pantle, reveals that Australian exports of 12 key commodities affected by Beijing’s sanctions — such as coal, barley, beef, timber, lobster and wine — plummeted. a staggering $17.3 billion in the first nine months of 2021, compared to 2019.
But at the same time, our closest “strategic friends” — led by the US, as well as Canada and New Zealand — have had a windfall, with US exports up $6.3 billion, Canada’s $A1.5 billion. and New Zealand with $1.1 billion.
In other words, while our partners have supported us loudly on the global stage, they have had no qualms when it comes to muscling the trade.
“Australia’s strategic friends have provided useful rhetorical support for Australia’s predicament,” the report said.
“But the results show a parallel commitment to advancing their own commercial interests, including by recovering lost Australian sales and increasing trade with the People’s Republic of China (PRC).”
And the betrayal goes one step further, as our allies also fail to buy anything from us in our time of need.
“Expressions of solidarity with Canberra have also not extended to strategic friends who have significantly ramped up their purchases of Australian goods disrupted by the PRC to help cut costs,” the report continues.
For example, from January to September of this year, Australian wine sales to China fell by a whopping $480.5 million ($A675 million), compared to 2019.
But surprisingly, US purchases increased by just $7.1 million ($A9.9 million).
“For Australian wine producers, market diversification is as difficult, long and costly a process as ever,” explains the report.
Nor is there a broader reorientation of Australian trade patterns towards countries with which Australia shares values, such as the pursuit of democracy.
Compared to January-September 2021 with 2019, world markets have diverted Australian exports of goods such as coal to Turkey (up $191.4 million, $269 million), barley to Saudi Arabia (up $520, $4 million, $731 million) and cotton to Vietnam (up $350.5 million, $492 million) – other countries where alignment with Australia’s values is unclear.”
‘This is not normal’
Speaking to news.com.au, Professor Laurenceson emphasized that while “the numbers are pretty brutal”, it in no way undermined Australia’s crucial alliance with the US.
“This shouldn’t surprise anyone, and it certainly doesn’t surprise Australian companies,” he explained.
“This is the real world – you can be good friends with your strategic and security allies, but at the same time, producers from those countries can be your biggest commercial rivals.
“Nobody’s saying you shouldn’t partner with the US…nobody’s talking about that alliance because this is exactly what was expected – that we’d end up bearing the cost.
“We’re not suggesting the US is doing anything devious here – Washington isn’t going to tell its producers ‘please don’t take this opportunity because we want to help Australia’ – that’s a joke and it’s not going to happen, the cost will be borne by Australian producers, and only Australian producers.”
In that regard, Professor Laurenceson said he did not believe that our current predicament was inevitable, and that it was instead the consequences of our own actions.
“Many countries have problems in their relationship with China, but no other country has been affected by the series of trade disruptions Australia is currently experiencing,” he said.
“This is not normal, and I think with effective diplomacy we would not have to be in this situation.
“People put up stupid binaries and say, ‘What do you expect, that we shouldn’t stand up for our values?’ Every country stands up for its values, but Australia bragged and got ahead of the rest, and that poor diplomacy has put us in this predicament.”
Unfortunately, Professor Laurenceson said he didn’t expect the trade war to end anytime soon, as both China and Australia seemed unwilling to back out.
ScoMo the ‘root cause’ of decline
Unsurprisingly, the report’s findings were picked up by the mouthpiece of the Chinese Communist Party Global times, in which a recent article argued that Australian companies’ “disappointment” over the trade war was aimed not only at China, but also the Morrison government.
“They should be clearly aware that the root cause of the deterioration in China-Australia relations is not in China, but in the Morrison administration, which has repeatedly entered China’s red line on issues affecting China’s core interest, “
“It is believed that they have more dissatisfaction with their own government.
“… the fact is that Australia’s continued provocations against China are the main cause of the deterioration of relations between China and Australia. And China’s response was simply a rational response to Australia’s provocations.”