Weaponised Trade : Mapping the Issues for Australia

The 2020 Defence Strategic Update recognises that Australia’s interests are corroded where states evade the rules-based order to carry out subversive ‘grey-zone’ activities in pursuit of interests contrary to Australia’s. Weaponised Trade is a grey zone activity of particular concern for Australia insofar as it challenges Australia's economic prosperity and security, as well as the rules-based international order on which Australia depends.It is well understood that international trade is essential to Australia’s national prosperity and security. International trade rules help to advance Australian interests by promoting trade relations that are non-discriminatory, predictable, and transparent. In this context, the use of trade measures as weapons to disrupt the flow of goods and services and advance broader political agendas represents a real and present danger.While Weaponised Trade can inflict major harm on any country, it has always held particular risks for smaller, relatively trade-dependent countries like Australia. In recent years, a number of factors have served to amplify those risks, including geostrategic rivalries, the erosion of multilateral institutions, and changing political dynamics.In this context, there have been growing concerns in Australia and globally about Weaponised Trade. There is an urgent need to better understand the scope of the problem and formulate appropriate policy responses.The concept of Weaponised Trade allows proper contextualisation of predatory economic activity. It highlights the fact that – in an economically interdependent world – some governments may seek to manipulate trade relations to intentionally harm other countries and advance broader geostrategic objectives. It is therefore important for governments to be aware of the security challenges posed by Weaponised Trade and to be cognisant of the range of diplomatic and policy responses available. The purpose of this report is to provide an introduction to the concept of Weaponise Trade and its growing relevance to Australia, and to provide an overview of key responses, including a new research project funded by the Australian Government Department of Defence