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Trade pact a prodigious step forward

The US, for example, has jammed a wedge in its bilateral agreement with China as President Donald Trump pursued a more protectionist economic agenda and, later, railed about China’s handling and reporting of the coronavirus.

At the same time, China appears to be enacting a form of economic revenge against Australia for its policies. Punishing tariffs were imposed on Australia’s barley exports earlier this year after Australia proposed an independent, international inquiry into the COVID-19 outbreak in Wuhan.

Then China accused Australia of dumping wine at below-cost prices. Cotton growers have complained about edicts apparently demanding China’s domestic mills cease Australian purchases.

Tonnes of quality Australian lobster was left to swelter and rot on Shanghai’s airport tarmac as Chinese officials mused about the possibility of chemical contamination. Copper, coal and timber exports are also being threatened by China’s reprisal.

What so upsets China? For one, it does not like being belittled. It objects to Australia’s increasingly tough stance against foreign agents interfering in government matters. It objects also to Australia’s denunciation of China’s strong-arm, imperious approach in Hong Kong, where peaceful, pro-democracy demonstrators have been illegally detained and street protests crushed.

China’s shift to a more authoritarian stance in its international relations has taken many forms. But slapping bans on what should be free and fair trade, hampering exports, delaying ships and dictating what can and cannot be purchased by its own businesses verges on a breach of longstanding free-trade agreements that were sealed with the best of mutual goodwill.

By using trade as a weapon to force change in Australian policies, China is behaving poorly. Australia is entitled to ensure its national interests are looked after, including those of its farmers, manufacturers and service-providers.

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Trade should not fall victim when one nation interprets another’s policies as disrespectful. The arena for resolving perceived slights is the political one.

The bold, new RCEP agreement is a chance to at least partly reset China’s position in a region where ASEAN member states are deeply uncomfortable with increasing militarisation by one of the biggest economies in the world. It provides an international rules-based order of free, or mostly-free, trade and will assist in growing the wealth and ambition of hundreds of millions of people.

The performance of signing RCEP, momentous as it is, will not by itself let China off the hook. It must play by the rules and be transparent in the way it trades. After all, free, open and transparent trade signifies the maturity of a nation and, importantly, the depth and sincerity of its commitment to warm international relations.

Note from the Editor

The Age’s editor, Gay Alcorn, writes an exclusive newsletter for subscribers on the week’s most important stories and issues. Sign up here to receive it every Friday.

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