China trade dispute: AUS barley tariffs not yet fixed

As a result of China’s request for an additional month to make a decision over whether or not to remove heavy duties on Australian barley, hopes of a quick resolution to one of the most contentious trade issues between the two nations have been dashed.

The administration of Albanese expressed its dissatisfaction with the delay and warned that it was prepared to re-file its complaint with the World Trade Organization (WTO) if Beijing does not abandon the move by the end of August.

A failure to reach an agreement would also be a blow for Australian wine exporters, as the government had hoped that the barley review would wind up being a “template” to abolish comparable imposts in that sector. However, if an agreement is not reached, this would be a setback.

At the height of diplomatic tensions in the year 2020, China placed taxes on Australian barley of 80.5%, which wiped off a trade that was formerly worth $1.2 billion each year.

China’s tariffs on barley came to an end on Tuesday, marking the conclusion of a three-month period during which China was required to reconsider the charges in exchange for Australia’s agreement at the eleventh hour to halt its case at the WTO.

Both China and Australia have informed the WTO dispute panel that they have reached an agreement to prolong the suspension for an additional month, until August 11th.

On the other hand, a representative for the minister of foreign affairs, Penny Wong, and the minister of trade, Don Farrell, indicated that Australia will not give any additional extensions.

According to the statement made by the spokesperson for the Australian government, “The Australian government has been clear in our view that there is no justification for these duties” and “that it is in the best interest of both countries for all trade impediments to be removed.”

“Although we are disheartened that China’s evaluation could not be finished within the first three months, we continue to hold out hope that the obstructions will be removed in the not-too-distant future.

“Australia will resume the dispute in the WTO if the duties are not lifted at the end of the four-month period,” said the Australian government.

If Australia decides to bring the case before the WTO again, it won’t have to begin from square one because the procedure will restart where it left off when it was put on hold. The final report from the dispute panel was about to be released.

As part of the agreement that was announced in April, China’s commerce ministry agreed to conduct an “expedited” review of the barley tariffs. This could provide Beijing with a way out of the measure without exposing themselves to the possibility of a negative WTO verdict.

Despite the fact that Wong and Farrell had previously stated that the review might potentially extend into a fourth month, the delay is seen as a setback, considering that their administration has been pushing for real progress on the trade issues.

It was reported this week that a trip to China by Prime Minister Anthony Albanese could be postponed until the following year, despite the fact that the administration has been working to create more favourable conditions for the possibility of his going there.

Since coming to office, Labor has made efforts to “stabilize” Australia’s relationship with its most important trading partner, including seeking conversation and making a promise to shift the “tone” of Australia’s communications.

Over the course of the past half year, China has taken a number of moves to defuse the situation, including restarting its imports of Australian lumber, coal, and stone fruits.

Last Monday, the Australian Thoroughbred Breeders Association announced that it had been informed that China had started awarding import licences for Australian horses for the first time since 2019.

There are still prohibitions on the importation of Australian grain, wine, seafood, and red meat.

The relationship between the two countries has become even more strained as a result of Hong Kong’s decision to issue arrest warrants for an Australian citizen and an Australian resident for alleged violations of the territory’s all-encompassing national security law.

Kevin Hogan, the trade spokesperson for the opposition, made these statements before it was announced that the barley extension would be implemented: “The only reasonable and acceptable resolution from the review process is the complete and unconditional lifting of the tariff on barley.”

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