Australia is focused on diversifying its trade markets to reduce its dependence on China, but it lacks a trade agreement with Taiwan. Taiwan is a significant market for Australian exports, especially for agricultural products, and pursuing a bilateral trade agreement with Taiwan could be beneficial. However, geopolitics and China’s opposition make it challenging to achieve. The Australian government should not let Chinese concerns dictate its trade access agenda.
The Push for Trade Diversification in Canberra
The Australian government, led by Anthony Albanese, continues to prioritize trade diversification as it seeks to reduce reliance on China. Trade Minister Don Farrell has successfully negotiated free trade agreements with India, the United Kingdom, and is progressing negotiations with the European Union. Efforts to strengthen trade ties with ASEAN and New Zealand are also underway. However, there is still a notable absence of a trade agreement with Taiwan, despite it being a significant market for Australian exporters.
The Importance of Pursuing a Bilateral Trade Agreement with Taiwan
Taiwan is Australia’s fourth largest merchandise export destination, worth a colossal AU$30 billion in Australian goods in 2022. While it dominates in energy and minerals, there is a potential for Australian agricultural products to gain a competitive edge in Taiwan’s wealthy consumer market through a free trade agreement. While geopolitical constraints make it unlikely to include Taiwan in the CPTPP, pursuing a bilateral trade agreement with Taiwan is a viable option that could benefit both countries, as Taipei also supports closer trade ties with Australia.