New Zealand backs Australia in trade spat with China ahead of Ardern-Morrison meeting

Australia’s Prime Minister Scott Morrison arrived in New Zealand on Sunday for high-level talks hours after the country’s government chose to support Canberra in its dispute with China on barley tariffs, signalling good will to work on differences in how to approach Beijing.

Quarantine-free travel between Australia and New Zealand began last month after both nations controlled the spread of COVID-19, allowing Morrison and Prime Minister Jacinda Ardern to meet face to face for the first time in 15 months.

The talks were likely to be challenged by differences over China, the biggest trading partner of both countries, with Australia at loggerheads with Beijing and New Zealand taking a more accommodating approach.

China has in recent months moved to restrict imports of Australian products such as barley, wine and beef, with the World Trade Organisation saying on Friday it would establish a dispute settlement panel to resolve the barley row.

Ahead of Morrison’s visit, New Zealand Trade Minister Damien O’Connor said his government was backing Canberra in the spat.

“New Zealand 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,” local media cited O’Connor as saying.

“New Zealand was not 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.”

Australia’s ties with China have sunk to their lowest point in decades in the past 18 months after Morrison led calls for a global enquiry into the origins of COVID-19 and Australia barred Chinese tech giant Huawei Technologies Co (HWT.UL) from its 5G network.

New Zealand’s economic ties with China have been strengthening, with the two countries this year upgrading their free trade agreement.

New Zealand also said last month it was “uncomfortable” with expanding the role of the Five Eyes, a post-war intelligence grouping that also includes the United States, Britain, Australia and Canada. This raised speculation that Wellington did not back the group’s recent criticisms of Beijing. read more

China has accused the Five Eyes of ganging up on it with statements on Hong Kong and the treatment of Muslim Uyghurs in Xinjiang.

Formal talks between Ardern and Morrison, expected to be dominated by China and its growing influence in the region, are to take place on Monday.