Tag: Trade

China has imposed heavy tariffs on Australian wine, barley, and meat this year
Asia Pacific Focus

China has imposed heavy tariffs on Australian wine, barley, and meat this year

China has hit the Australian economy hard by imposing heavy taxes on Australian wine, barley, and suspending meat imports. The Chinese importers were advised to expect customs delays across seven classifications of Australian goods from coal to fish from November. 

Australian wine with tariffs will cost twofold of its actual price, making the market unsuitable for exporters, as per the trade minister, Simon Birmingham. 

Moreover, from Nov. 28, China has also decided to impose anti-dumping tariffs of 107.1% to 212.1% on imported wine from Australia, the Chinese Ministry of Commerce announced. 

Australia’s trade minister Simon Birmingham stated that the tariffs were untenable, and it was a painful step for several winemakers since it “will be unviable for some businesses, and their wine trade with China”. 

China takes 37 percent of Australia’s all-out wine trades, an industry worth AU$2.9 billion, the public authority said. 

A week ago, China planned a list of grievances about Australia’s foreign investment, human rights policy, and national security, saying Canberra expected to address its activities to reestablish the respective relationship with its biggest trading partners. 

“China’s recent remarks states that it’s more about their complaints around those issues, as opposed to indeed around anything any industry has fouled up,” Australia’s agriculture minister David Littleproud stated.

He added, “It simply doesn’t stress Australian exporters, it stresses exporters from around the globe.” 

On Friday, China’s foreign ministry spokesman Zhao Lijian stated that the measures were in order with Chinese laws. China urged Australia to improve mutual ties between the nations. “They should consider whether they have regarded China’s interest,” he added. 

China started an anti-dumping probe in August as the Chinese Alcoholic Drinks Association requested, however, in Canberra, the first decision to impose taxes was seen as a component of an example of punitive trade actions since Australia required an independent investigation into the origins of the Covid-19 pandemic. 

Birmingham highlighted “the total effect of China’s international restrictions against various Australian goods and stated that if they were a reaction to different factors, then this would be “totally incongruent with the promises China has made to the World Trade Organization (WTO). 

The importers buying Australian wine will have to pay the customs authority of China, which will be determined dependent on various rates the authority has allocated to different organizations, the statement added. 

The rate expected of Treasury Wine was 169.3%, the highest among all the named wine companies in the announcement. The shares of Australia’s Treasury Wine Estates Ltd. fell over 13% before being put on a trading standstill. 

The steps could shut down the Chinese market to Australia, expressed Tony Battaglene, CEO of Australian Grape and Wine Inc.

“Some will continue selling expensive wine if individuals are ready to pay for it. However, it turns out to be extremely intense when you’re competing with wine where they’re spending 12% or 14% duties, or zero taxes on account of New Zealand and Chile, and you’re spending 200%. Everybody will be struggling now, searching for different business sectors, Battaglene added.” 

An exporter of Australian wine in Shanghai reported Reuters: “I will quit bringing in Australian wines for 3 months to perceive how things work. Numerous merchants will end the business, as per what I know, since it is just not good for trade.” 

On Friday, Australia stated it was “very baffled” by China’s decision to force primer taxes on Australian wine, further heightening political pressures between the two nations. They will hold a conference with winemakers.

RCEP, the largest trade agreement in the world has born
Geopolitics

RCEP, the largest trade agreement in the world has born

The largest trade agreement: The free agreement in history has been signed in the Vietnamese capital of Hanoi. We are talking about Asia, and yes above all, about China. In fact, Beijing brings home an unprecedented result: a commercial alliance with the nearby “Asian tigers” and with Australia and Japan, long ago in the US orbit created by Obama thanks to the TPP, later abandoned by Trump. An abandonment that left the Land of the Rising Sun orphan of its major commercial partner and which therefore forced him to turn to the second on the list, namely China, with which, however, he had not yet signed any commercial agreement. 

And in addition to the unpublished agreements on duties, eCommerce, and intellectual property, what stands out most of all is precisely this newfound multilateralism in a region, that of Asia-Pacific, which has always been studded with differences and frictions. Thanks to the RCP, and to the end of America first, Beijing proves that it can become the new epicenter of multilateralism, by signing an agreement of historic significance. For the first time, three of the top four Asian economies – China, Japan, South Korea – will be part of the same free trade agreement.

For some time, China has been trying to establish itself in the Asian region as a champion of multilateralism. And not just in Asia; we think of the new Silk Road, of investments in Africa, of those in European ports and commercial hubs, Italy in the lead. The RCEP is nothing more than a – great – complement to a party strategy that starts from far away. In addition to its immense commercial grade, the agreement has a significant political value.

 In the competition with the United States for world supremacy, Beijing has patiently and determinedly pursued its diplomacy, and it has built, for now only on paper, an influence block which represents 30% of global GDP and which, nevertheless, welcomes Washington’s old allies. However, it is a success for the whole area. From Japan, which manages to defuse the ongoing trade war between China and Australia, to then move on to the same ASEAN area, which expects to benefit widely from the reduction in tariffs.

Screenshot 2020 11 21 at 5.41.55 PM 1024x575 - RCEP, the largest trade agreement in the world has born

Even with India absent, the numbers of the agreement are impressive. We are talking about an area that, as we have seen, produces almost a third of world GDP and hosts 2.7 billion people. It includes all ten ASEAN countries, the Association of Southeast Asian Nations, plus China, Australia, South Korea, Japan, and New Zealand. Observers estimate that it will strengthen economic ties within the region and add about $ 200 billion a year to the global economy. In terms of the GDP of the signatory countries, it will also have a greater weight than NAFTA in North America and the European Union itself. The result for Asia will be the strengthening of regional supply chains. An aspect on which Beijing is increasingly aiming to reduce Asian dependence on the United States.

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The focal point of the agreement reached is the commitment to progressively reduce duties by up to 90% on goods in circulation over 20 years – to 65% in the short term. That means goodbye to the many bilateral agreements in Asia that limited the circulation of goods and caused costs to rise. Thanks to the RCEP, it will no longer be necessary to conclude specific agreements between two states each time to remove duties on traded goods. From now on, a member country of the RCEP producer will be able to trade freely with all the other 14 nations of the agreement. According to analysts’ estimates, 86% of Japanese industrial exports to China and 92% of exports to South Korea will benefit from the cancellation of existing tariffs.

 The most important novelty is represented by the “rules of origin,” as the rules officially define the origin of a finished product. Today, a product made in Thailand that contains New Zealand parts, for example, could be subject to duties in some Asian states. Under the RCEP, on the other hand, the components of any member country would be treated in the same way, giving companies in the area an incentive to seek suppliers within the commercial region.

Australia Tried To Mend Ties With China Over Expo Visit
Asia Pacific Focus

Australia Tried To Mend Ties With China Over Expo Visit

The recent visit by the Australian ambassador to the 3rd China International Import Expo (CIIE) in Shanghai is being seen as a desperate move to reconcile differences.  

Australian Ambassador to China, Graham Fletcher is visiting China, after Shanghai stopped exports for seven categories of key commodities of the Australian market. This has hit the Australian economy severely after the pandemic led slowdown in the economy. 

Some Chinese political analysts believe it clearly shows Australia’s need for the Chinese market. Since the onset of the pandemic, trade relations had started to sour between Australia and China. The skirmish that was sparked by Australia urging a formal inquiry into the origins of the Coronavirus, may now erupt into a trade war. 

The Chinese consumer’s sensibilities is greatly fueled by its sense of importance as a sovereign nation. This time; that has taken a beating, with Australia pointing fingers at China’s dubious dealing with the outbreak of the virus from its key meat market in Wuhan.

This has also shown in the way China has already asked traders to stop purchasing at least seven categories of Australian products – coal, barley, copper ore and concentrate, sugar, timber, wine and lobsters. The “most sweeping” halt will begin from tomorrow. 

It seems Australia is experiencing a foot-in-the-mouth moment where it now regrets its stand. The truth is, that, it cannot afford to lose China has its single largest export trade partner, lest it can rustle up replacements quickly. 

On its side, China has made it clear, they want Australia to speak for itself and not be a mouthpiece of the US. Earlier this year, Australia seemed to be participating in the Trump lead anti-China campaign. However, this anti-propaganda has landed it up in a deep soup. Decoupling is going to take time, as the Australian economy has been dependent on China for decades. According to some political bigwigs, Australia is not prepared to look for greener pastures.

Brexit deal likely by autumn, EU says
Europe

Brexit deal likely by autumn, EU says

European Union leaders will intervene soon in order to bring the Brexit talks to a conclusion by autumn, according to Berlin’s representative in Brussels.

Following the United Kingdom’s statement last week that talks can’t go on forever and needed to be concluded before autumn, Germany’s ambassador to the EU Michael Clauss confirmed that the EU was working towards this. Political intervention was likely and inevitable, and this would be EU’s main focus in September and October along with arriving at a pandemic recovery package for the bloc.

Saying that no real progress has been made so far on the negotiations, he said that Ursula von der Leyen, the European commission president, Charles Michel, the president of the European council, and Boris Johnson would meet this month to take stock. This will help negotiators arrive at a conclusion about whether no-deal planning was necessary. The UK has made it clear that it is not willing to budge from its red lines and it is up to the EU to accept this and arrive at a reasonable compromise.

UK officials are already of the opinion that an autumn deal would be too late as it would not give British business enough time to prepare for the end of transition without the knowledge of what kind of trade agreement has been reached. In the last round of negotiations, there was stalemate across the board in access for European fishing fleets to UK waters, the role of European courts, return for a zero-tariff trade deal, and common environmental, social and labour standards. UK negotiators have been repeatedly calling for EU’s political leaders to intervene to break the stalemate.

EU has been saying that Britain cannot have a full sovereignty and full access to the internal market, but it would have to give away some sovereignty to secure free trade. A compromise would have to be reached with the objective of arriving at a deal at the European Council summit on 15 October. It can’t be much later, according to EU insiders, because it would then need to be ratified by the European parliament which would need some time.

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