AUSTRALIA- Australia has reached a deal with China to attempt reopening the Chinese market to Australian barley after China imposed an 80% import tariff in 2020 and turned to Canada, France, and Argentina for most of its barley imports.
The once-cozy trading partners are on the way to stabilizing their now-sour relationship caused by China’s punitive tariffs on Australian barley and wine exports.
The dispute began in May 2020 when Australia called for an independent investigation into the origins of and the Chinese government’s response to the COVID-19 pandemic, which originated in Wuhan, China, in late 2019, spread worldwide, and wrecked the global economy.
Australia responded to the punitive tariffs by complaining to the World Trade Organization, alleging China had breached international obligations by unjustifiably jacking up tariffs artificially.
China argued the move was needed to level the playing field because the sector gained subsidies and Australian barley was being “dumped” cheaply on the Chinese market.
Before the dispute, China purchased approximately US$1 billion of barley per year from Australia, and the import tariff essentially cut off the market of what was Australia’s biggest barley customer.
Acting prime minister Penny Wong says that China has agreed to review its duties on the grain over three or four months, and Australia will temporarily suspend its World Trade Organization dispute over the matter during that review period.
“We have also made clear that we believe it is in both countries’ interests for these trade impediments to be removed,” Wong remarked.
Wong, however, said the Australian government would resume the WTO dispute process if China did not remove the barley tariffs at the end of the review period.
Trade minister Don Farrell said this move was a “sign of goodwill” and a step towards resolving other outstanding issues between the two countries.
“We hope that this will be a template for then moving on to the other areas of dispute, in particular in respect of Australian wine, which is also subject to very high tariffs,” Farrell said in a press conference.
Maltsters in China are waiting for the return of Australian Barley although they already have stocks for this year, says Yang Zhenglong, general manager at Malteurop China.
“It looks like Australian barley will go back into the Chinese market, which is bad news for other suppliers like France, but also Argentina and Canada,” a European trader said.
Australian leaders and grain organizations support the government’s efforts to re-establish barley trade with China.
“Grains Australia applauds the efforts of industry organizations and government stakeholders to progress access to this premium-paying market for Australian barley growers,” said Richard Simonaitis, CEO of Grains Australia.
“This development is a win for consumers and customers in China, as well as for our Australian growers,” he added.
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