Australia's live lobster news, China's quiet response, and quid pro quo questions
Weeks of 16 September to 13 October 2024
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Is China’s campaign of economic coercion over?
Minister for Trade and Tourism Don Farrell speaking to a journalist on 12 October 2024 about the official re-entry of Australian live lobster into the Chinese market before the end of the year:
“This is an ironclad guarantee.”
Quick take:
After many months of industry anticipation and media speculation, Prime Minister Anthony Albanese announced on 10 October that he and Premier Li Qiang had agreed to “a timetable to resume full lobster trade by the end of the year.” This plan is expected to see Australian live lobster officially re-enter the Chinese market by December or maybe even earlier. Yet the precise timeline and technical requirements for the removal of China’s trade restrictions remain to be seen. In a doorstop interview on 11 October, Minister for Agriculture, Fisheries and Forestry Julie Collins declined to answer several questions from journalists about what exactly the Australian lobster industry would need to do to regain official access to the Chinese market. Although there are some details yet to be determined, or, at the very least, publicly disclosed, the Albanese government seems confident that the dismantling of China’s trade restrictions on live lobster is a mere matter of time.
But even assuming that we can bank on Farrell’s “ironclad guarantee,” it’s too early to now declare the definitive end of China’s campaign of economic coercion. Not only are the trade restrictions on live lobster yet to actually be removed, but it appears that there might still be some ongoing bureaucratic negotiations over Tropical Rock Lobster in particular. As with exports of this crustacean from other jurisdictions, Tropical Rock Lobster from Australia might need an extra push from Canberra to overcome Beijing’s trade barriers. To be fair, it’s debatable whether the trade restrictions on Tropical Rock Lobster were really part of China’s broader barrage of coercive economic measures against Australian exporters considering that they’ve been directed elsewhere, too. Yet even so, there’s also the outstanding issue of trade restrictions on two Australian red meat exporters, which are yet to receive relief.
None of this necessarily means that the remaining trade restrictions will last much longer. The sureness of the Albanese government’s pronouncements, the lack of public pushback from Chinese officials, and Canberra’s and Beijing’s longstanding emphasis on trade relationship repair all suggest that the live lobster and red meat trade restrictions will go in the coming months. But with costly trade restrictions still in place right now and many international political, economic, security, and other shocks possible in the coming months, it’d be premature to say at this moment that China’s campaign of economic coercion against Australia is officially over. If Australian live lobsters make it onto the resumed direct flights from Perth and Adelaide to Guangzhou, which are, conveniently, set to take off again in November and December, respectively, it’d mean that the last of China’s trade restrictions would tumble 4.5 years after the campaign of economic coercion commenced. Although China’s final trade restrictions are yet to removed, something approximating that timeline looks most likely for now.
China’s (relative) radio silence on the live lobster announcement
Ministry of Foreign Affairs (MFA) Spokesperson Mao Ning responding on 10 October 2024 to a question from a journalist about the live lobster trade announcement:
“I’d refer you to competent authorities for specific questions about economy and trade. What I can tell you is that China stands ready to work with Australia to continue properly resolving issues of each other’s concerns through dialogue and consultation, so as to build more mature and stable bilateral relations for the benefit of the two peoples.”
Quick take:
Beyond all the understandable positivity from the Albanese government and enthusiasm from Australian seafood exporters, the comparative quiet from the Chinese government and media was one of the most conspicuous elements of the live lobster announcement. This news wasn’t mentioned in the Chinese government’s public readout of the meeting between Albanese and Li, MFA was taciturn in response to a question about this development, and many of the biggest Chinese media outlets said nothing about it (here, here, here, and here). To be fair, there wasn’t total silence. But even when the nationalistic tabloid Global Times noted the news, it was described as being relayed by Prime Minister Albanese and reported by foreign sources (as opposed to also having the overt imprimatur of Beijing’s authority). Meanwhile, neither Australian lobster nor the Albanese-Li agreement were referenced in a subsequent Global Times article talking up the prospects of Australian agricultural exports to China and celebrating recent bilateral trade relationship repair. These are admittedly just a few datapoints and hardly definitive proof of anything. And yet they give a very different impression of the significance and surety of the timetable to remove the live lobster trade restrictions.
On one level, China’s pared-back response is hardly surprising. As others have rightly pointed out, the Chinese government probably has little to gain domestically from ramping up coverage of the agreement for a timetable to remove its live lobster trade restrictions against Australia. Nevertheless, this relatively quiet reaction from both the Chinese government and media is out of step with how China covered previous similar announcements about plans to remove trade restrictions. Consider, for example, the extensive Chinese media reporting of the pathway announced in April 2023 to remove anti-dumping measures on Australian barley (here, here, here, here, and here). Of course, this isn’t a like-for-like comparison given that, unlike live lobster, the barley case involved, among other things, third-party World Trade Organization dispute proceedings. Still, the contrasting amounts of publicization by China is striking and enough to pique my interest.
Is China on the hunt for a face-saving measure?
Premier Li speaking to Prime Minister Albanese on 10 October, according to the Chinese government’s readout of the meeting (here and here):
“China … hopes that Australia will provide a fair, safe, non-discriminatory and predictable business environment for Chinese enterprises to invest and operate in Australia.”
Quick take:
What, if anything, might China’s relatively muted response to the live lobster announcement mean? An open-source account will inevitably be speculative. And it’s possible that I’m over-interpreting the available evidence. But it equally seems plausible that China has decided to give the live lobster announcement a low profile while it waits for a development that it can construe (rightly or wrongly) as Australia offering a concession. China has form for approaching bilateral ties in such transactional terms. Beijing previously suggested that it dropped anti-dumping measures on Australian wine as part of a quid pro quo deal in which Canberra discontinued its own anti-dumping measures against Chinese wind towers. Notwithstanding the near-simultaneous removal of these anti-dumping measures, it’s worth noting, of course, that Canberra denies the insinuation that both capitals were making calculated concessions. Regardless, China might now be holding out for a move by Australia that could be similarly presented (rightly or wrongly) as the Albanese government giving something in exchange for official live lobster access. Maybe it’ll involve Australia discontinuing anti-dumping measures against other Chinese products in addition to some hollow structural sections, which received relief from Australian anti-dumping measures last month? Maybe it’ll come in the form of the Albanese government approving one or more of Beijing Energy International Holding’s circa $1.1 billion in planned renewable energy acquisitions in Australia (here, here, and here)? Or maybe it’ll be the Australian Foreign Investment Review Board giving the green light to Chinese company Trina Solar’s roughly $400 million battery energy storage project in Western Australia?
It’s obviously possible that we’ll see the live lobster trade restrictions tumble later this year without any Australian decisions that could be spun as being part of a negotiated settlement with China. And, to be clear, even if China seeks to portray certain Australian decisions in that way, it doesn’t ipso facto follow that those decisions were in fact taken to please Beijing and secure the end of the live lobster trade restrictions. In other words, it’s possible that Canberra might, for example, discontinue anti-dumping measures based on independent and rigorous advice and for reasons unrelated to securing official access to the Chinese market for Australian live lobsters. Yet China might still seek to (perhaps deceptively) present such a decision as being part of a negotiated settlement to make it appear that Beijing has gotten something in return for the removal of its trade restrictions on live lobster. All those caveats said, it seems there’s a strong possibility we’ll see a decision from Australia on anti-dumping measures, Chinese investments, or something similar in the coming months, which China can interpret and/or portray (rightly or wrongly) as the Albanese government coming to the table for a negotiated settlement. This might in turn provide Beijing with the face-saving measure that it’s looking for and thereby give it licence to start trumpeting the end of the live lobster trade restrictions.
I’m amazed at China’s patience with our abusive government and slanderous media.