China lifts tariffs on Australian barley after three-year-old dispute 

CHINA- The Chinese Customs Tariff Commission has finally ended the anti-dumping and countervailing duties on Australian barley, starting 5th August 2023, as relations between the two countries begin to warm up.

China implemented the tariffs in 2020 amid diplomatic tensions, initially set for five years. 

The dispute between the two countries 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.

According to the Australian Foreign Ministry, the 80% tariffs on Australian barley “effectively blocked exports” to China, worth about US$916 million in the last year free trade was allowed (2018-2019). 

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. 

In April this year, Australia’s acting prime minister Penny Wong said that China had agreed to review its duties on the grain over three or four months. Australia agreed to 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.

At the request of the China Wine Industry Association, the Ministry of Commerce of the country recommended to the tariff authorities to remove the tariffs. 

Now that the review period is over and China has lifted the punitive tariffs, the Australian government has swiftly suspended its case at the World Trade Organization.

Similar hopes for wine

While it is a relief that Australian Barley is back on the Chinese market, China is yet to remove the tariffs of up to 218.4% on Australian wine, according to the Australian Grape & Wine Organization. 

The mainland China market reached 36% of the sector’s exports until 2019, with a value of AUS$1.09 billion (US$0.71 billion). 

Now exports are down over 98% to AUD$21 million (US$13.77) in the market year until September 2022, according to Wine Australia. 

“We remain confident in the outcome for Australian wine at the WTO. If the agreement is successful in providing a pathway for lifting duties on barley, we expect a similar process to be followed to remove trade barriers for Australian wine,” said the Australian Minister for Trade and Tourism, Don Farrel, and the Minister of Agriculture, Fisheries and Forestry, Murray Watt, in a statement, earlier in the year.

“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,” Farrell said in a press conference.

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