Money: China takes Australia's Huawei 5G ban to global trade umpire - PressFrom - Australia
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MoneyChina takes Australia's Huawei 5G ban to global trade umpire

16:25  15 april  2019
16:25  15 april  2019 Source:   smh.com.au

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China takes Australia's Huawei 5G ban to global trade umpire© Bloomberg China has complained to the WTO about Australia's Huawei ban.

The Australian government says it will be standing by its ban on Huawei's participation in the rollout of ultra-fast 5G technology, rebuffing a Chinese complaint to the World Trade Organisation.

The complaint, made at a WTO meeting in Geneva on Friday, does not mention the telecommunications company by name but refers to Australia's "discriminatory market access prohibition on 5G equipment", according to the meeting's agenda seen by The Sydney Morning Herald and The Age.

The complaint has been lodged with the global trade umpire as the federal government has entered caretaker mode before the May 18 election.

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Trade Minister Simon Birmingham said in a statement on Sunday that the government "stands by its decision in relation to 5G, which was not targeted at any one country or telecommunications company".

Senator Birmingham said Australia respected WTO processes, was "confident in our compliance" and would respond to China's questions about the ban in the usual way.

Reuters reported that a Chinese diplomat told the meeting "country-specific and discriminatory restriction measures cannot address the concerns on cybersecurity, nor make anyone safe, but only disrupt the global industrial chain, and make the country itself isolated from the application of better technology".

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While WTO rules stipulate that members are not allowed to discriminate between trading partners, a national security exemption is available.

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Australia was the first Five Eyes intelligence partner to effectively ban Huawei from its 5G network, but the United States has since put pressure on other Western nations to follow suit.

The Australian change barred vendors "likely to be subject to extrajudicial directions from a foreign government". It was announced by the Turnbull government in the same week as the Liberal leadership crisis of August last year, which saw Malcolm Turnbull replaced by Scott Morrison.

The government has chosen its words carefully in justifying the ban but former foreign minister Julie Bishop last month said it was put in place because of concerns about the "blurring of lines between commercial activity and China's strategic goals" and the threat of economic coercion.

"Because of this perception of Chinese government intervention in commercial activities, the Australian intelligence and security community advised the Australian government to not include Chinese companies in the development of 5G mobile phone networks," she said.

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While Britain has been contemplating permitting Huawei some level of involvement in its 5G rollout, a government review has found national security risks flowing from "significant" security problems and "underlying defects" in the company's equipment.

Huawei has launched legal action against the US over the Trump administration's barring of the company. Huawei Australia says cooperation with Canberra is a higher priority than legal action but has not ruled it out.

Although a clear irritant to China, which is waging a technology and trade battle with the United States, Beijing's response to the Australian ban had been careful. The WTO dispute is the first formal complaint, and signals the incoming federal government may face a more forceful push-back from Beijing over the Huawei issue.

The government could also face the fallout for Australian exporters of any trade deal struck between US President Donald Trump and Chinese President Xi Jinping.

The International Monetary Fund on Friday revealed it had modelled the impact of a "managed trade" deal between the US and China — as distinct from multilateral free trade — on China's other trading partners.

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The IMF's deputy director of Asia, Jonathan Ostry, said that for Australia "the main issue that we worry about is possible trade diversion effects".

The IMF looked at the hypothetical case of $US50 billion ($70 billion) in goods from the US being traded with China and the spillover effect this would have as China imported less from other countries.

If there was a proportional reduction in exports across China's main trading partners, the impact on Australia would be relatively small, he said.

But if the US-China trade deal "involves more purchases of goods in commodities that are very high in the China-Australia trading relationship then the impact on Australian growth and so forth could be more substantial," he said.

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