Australian Trade Minister Craig Emerson joined US calls for China to adjust its currency yesterday and warned Europe that Canberra would not allow a revival of protectionism masquerading as environmentalism.
The newly appointed Emerson said he was confident about growth prospects in China, Australia’s key trading partner, but echoed warnings from the US about undervaluing the yuan to gain a trade advantage.
“The Americans are basically fed up and I can understand why,” Emerson said. “I think that it would be an appropriate response, if the Chinese did adjust the exchange rate.”
“If they want to present themselves frankly as having market economy status, well let’s have a few market forces applied to the exchange rate,” he said.
Public pressure on Beijing “tend[s] to be counterproductive,” said Emerson, adding that he would prefer to see it “happen over time as a natural sort of adjustment.”
“I think there’s a real issue here and I know it’s not as easy as just clicking your fingers in China to adjust the exchange rate because that will affect the competitiveness of their exports,” he said.
Strong demand from rapidly -industrializing China for Australia’s raw materials helped it become the only advanced economy to avoid recession during the global downturn, and Emerson said the Asian giant would continue to be key.
“Just about every time we feel that we’ve got a fix on what’s going on in China, it’s bigger than that,” he said. “It’s enormous what’s going on in China and I don’t think that there is grounds for pessimism about China’s expansion, there are grounds for ongoing optimism about China’s expansion.”
Emerson also warned that Canberra would not tolerate the resurrection of European trade barriers under the “green cloak” of punishing nations not prepared to tax carbon.
“Of course we are committed to putting a price on carbon, but let’s not believe that this is all about climate change,” Emerson told Sky News Australia. “There is a very clear European protectionist instinct, old protectionist instinct, under this green cloak of respectability and we won’t cop it.”
Australia would use “whatever rules, trading rules there are through the WTO to fight against the use of these devices to protect industries in Europe, or anywhere else, against competition,” Emerson said.
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