New Zealand to be third party to Australia, China trade row

New Zealand will be a party to a trade dispute between Canberra and Beijing over significant tariffs China imposed on imports of barley from Australia last year.

Australian barley imports were hit by 80 percent tariffs from China in May last year, largely seen as a political move in the wake of calls from Australia for an investigation into the origins of COVID-19. China said Australia was dumping the product there below cost, hurting domestic producers. 

In December, Australia took the row to the World Trade Organisation (WTO), which on Friday agreed to establish a dispute settlement panel.

New Zealand Trade Minister Damien O'Connor on Saturday night confirmed to Newshub that Aotearoa is "participating in this dispute as a third party because it raises systemic issues of importance to the effective functioning of the multilateral rules-based trading system". 

"New Zealand upholds international rules and norms, so ensuring international trade rules are fairly applied by others is important to us and our exporters," the minister said.

A third-party can make submissions to the panel and the Ministry of Foreign Affairs and Trade says New Zealand participates as one "when we want to influence the interpretation and application of WTO agreements on matters that are also of direct interest to us". 

O'Connor said New Zealand wasn't asked to join as a third party.

"However, we have been a third party in over 60 WTO cases since 1995 and it's not unusual for us to join actions disputes when we see challenges to international trade rules," he told Newshub.

"We rely on the rules-based trading system to provide a secure and predictable global trading environment for everyone so we will act to uphold it."

It comes ahead of Australian Prime Minister Scott Morrison's visit to New Zealand on Sunday, where issues around China are expected to be canvassed during talks with Jacinda Ardern. 

New Zealand has been accused of not supporting Australia during its feud with China over the last year. Beijing has placed tariffs on a range of Australian products as Canberra has become increasingly vocal about human rights breaches in the Asian powerhouse and around COVID-19.

Despite some commentary suggesting otherwise, New Zealand has stood with Australia on some occasions in expressing concern about China's treatment of the Uighur people and interference in Hong Kong. 

Foreign Affairs Minister Nanaia Mahuta has repeatedly said this year that Kiwi exporters should look to diversify their trade. China is currently New Zealand's largest trading partner.

She raised the "value of diversity" to long-term economic resilience in an April speech.

"It is prudent not to put all eggs into a single basket. The New Zealand government will continue to work with business to pursue a range of trade opportunities."

Professor of Law Alexander Gillespie wrote this week about New Zealand's consideration on whether to become a third party.

"Australia would undoubtedly prefer New Zealand to become involved as an official third party to the dispute process. China will likely want the opposite."

Australia's Trade Minister Dan Tehan said on Friday that the "anti-dumping and countervailing duties on Australian barley have effectively stopped Australia's barley trade with China". The exports to China were worth roughly $1.5 billion in 2018. 

Despite the escalation, Tehan said Australia remained open to further talks with China to resolve the despite, something Chinese representatives to the WTO also expressed interest in. China believes its actions are consistent with the WTO requirements.