https://www.aspi.org.au/report/economic-coercion-boycotts-and-sanctions-preferred-weapons-war
This report argues that the increasing use of economic coercion by both China and the United States poses a growing risk to businesses and undermines the integrity of the global trading system.
Australian businesses, which have engaged in legitimate economic activity under the 2015 China-Australia Free Trade Agreement, now face the potential danger of losing access to Chinese markets. This predicament arises from retaliatory measures taken by the Chinese government in response to Australian policies related to a coronavirus investigation and next-generation internet network development.
While Australian companies are not directly targeted by US sanctions, the extraterritorial reach of US sanctions exposes them to the risk of significant collateral damage should they inadvertently engage with individuals or entities subject to these sanctions.
The report describes the increasing use of trade as an economic tool, particularly over the past three years, coinciding with a global trade environment characterised by escalating protectionist tendencies.
In light of these developments, the report suggests that the Australian government should be prepared to use the dispute settlement mechanisms of the World Trade Organisation (WTO) to address Chinese trade barriers. It also argues that multilateral fora such as APEC, the G20, the OECD and the WTO should recognise the growing threat of economic coercion to the principles of free trade.
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