Australia picks a fight with China

Australia picks a fight with China

Australia was one of the first countries to ban Huawei’s involvement in the NBN back in 2012.

Then we banned it from building our 5G network in 2018.

Japan and New Zealand quickly followed our lead. So have Taiwan and the US.

In fact, the US is now pressuring other countries to follow suit and ditch any Chinese telco involvement in communications infrastructure.

This story may be months old now, but it’s not going away.

Turns out, Huawei — the world’s leader in 5G technology — isn’t going to take the loss of major business lying down.

At a World Trade Organisation (WTO) meeting in Geneva two weeks ago, Chinese officials brought up Australia’s 5G ban.

Australia has banned the Chinese-owned company on national security grounds.

And in return, China has informally whinged to the World Trade Organisation that it isn’t fair.

In saying that, it’s highly unlikely the WTO will overturn the ban.

According to former Australian trade negotiator Dmitry Grozoubinski, the WTO rules are loose enough that anything deemed a national security threat automatically means it’s unlikely to be challenged by the WTO. Grozoubinski told ABC news:

‘[The WTO] has a very broad national security exception that basically says that none of the rules in the agreement apply if the receiving country interprets them to be contrary to their national security interests.

Essentially, Grozoubinski says this broad definition isn’t used often, but the WTO specifically allows this type of ‘antitrade’ sentiment to pass.

Of course, Grozoubinski argues that the move is less about winning back our business and more about saving face.

Like I said, news of the ban is months-old now. But the repercussions may take years to play out.

Today, Jim says Huawei being booted out of business may inadvertently kick-start a cold war.

The only question is: How long will it last?

Until next time,

Shae Russell Signature

Shae Russell,
Editor, The Daily Reckoning Australia