The Morrison government has demanded that China rule out taking “discriminatory actions” against Australian cotton producers as the industry raised fears of becoming the next target in widening trade tensions.
With China the largest export market for Australia cotton, and with the trade worth about $800m annually, the government warned that curbs on producers’ ability to compete on a level playing field “could constitute a potential breach of China’s international undertakings”.
China’s National Development Reform Commission has started discouraging the country’s spinning mills from using Australian cotton, according to a statement issued by two Australian cotton industry groups on Friday.
Cotton Australia and the Australian Cotton Shippers Association said they were disappointed to learn of the changes, “particularly after we have enjoyed such a mutually beneficial relationship with the country over many years”.
“Our industry’s relationship with China is of importance to us and is a relationship we have long valued and respected,” the groups said.
“The Australian cotton industry will continue having meaningful conversations with stakeholders to fully understand this situation, and we will continue working with the Australian government to respectfully and meaningfully engage with China to find a resolution.”
Guardian Australia understands the instructions to importers in China about not buying Australian cotton have been issued in recent weeks but may have taken the form of verbal directives.
China has taken a range of actions against Australian exporters this year, including imposing prohibitive tariffs on barley, suspending imports from five red meat processing plants and launching two trade investigations into wine.
Australian coal has also reportedly become a target of Chinese authorities, prompting the Morrison government to seek assurances from Beijing this week.
The trade minister, Simon Birmingham, and the agriculture minister, David Littleproud, said on Friday they were aware of concerns about possible changes in export conditions for cotton exporters and were “seeking to clarify the situation”.
“Our cotton exporters have worked hard to win contracts and establish themselves as reliable suppliers of high-quality cotton in the Chinese market, which is an important input for many Chinese businesses,” Birmingham and Littleproud said.
“China should rule out any use of discriminatory actions against Australian cotton producers. Impeding the ability of producers to compete on a level playing field could constitute a potential breach of China’s international undertakings, which would be taken very seriously by Australia.”
Comment has been sought from the Chinese embassy in Canberra.
The Australian government, which copped flak from China for taking an early and forthright position in support of an independent international inquiry into Covid-19, has previously insisted it would not be deterred by economic pressure from standing up for its values.
But it has faced calls to seek a “reset” or “circuit breaker” in the relationship.
On Thursday, Sir Angus Houston, the former Australian defence chief, declared that China was Australia’s partner, not an enemy, and he accused some politicians of engaging in “loose talk” that had helped drive the relationship between Canberra and Beijing to “a very low point”.
“We need to take a hard look at our relationship with China, I think we need a reset, we need a circuit breaker, because, really, if we’re going to come out of this recession that we have at the moment because of Covid-19, we need China,” Houston said in a Lowy Institute event.