Australia reaches agreement with China over barley tariffs

Agreement between the two countries raises hope that 80.5% tariffs on Australian barley exports to China could be lifted within the next four months.

The Australian government has reached an agreement with China that could potentially see the latter lift punitive tariffs on barley that it imposed in 2020.

In a joint statement, foreign minister Penny Wong, agriculture minister Murray Watt and trade minister Don Farrell said the Australian government has agreed to temporarily suspend its appeal to the World Trade Organization over the tariffs, following an undertaking by China that it would carry out an “expedited review” of the tariffs over a three-month period. The review will extend to a fourth month if required.

The ministers said that if the tariffs are not lifted at the end of the four-month period, Australia will resume its dispute with the WTO.

China imposed tariffs of 80.5 percent on Australian barley in 2020, effectively killing what was a A$916 million ($613 million; €559 million) market in the 2018-19 financial year. It followed an 18-month investigation by China into claims that Australia had been dumping barley onto the Chinese market by exporting it at prices cheaper than the domestic market.

Then-trade minister Simon Birmingham said at the time: “Whilst Australia respects China’s right, as with any nation, to undertake domestic investigations into anti-dumping matters, we do not accept that there is a prima facie case, let alone a conclusive case, to find dumping by or subsidy of Australian producers.”

China also imposed tariffs on Australian wine that have all but eliminated China as an export market for Australian producers, as well as blacklisting several beef suppliers. The latter moves in the beef sector were later reversed. It is hoped that wine tariffs will be reviewed next should the current process around barley prove successful.

Jingye Cheng, the Chinese ambassador to Australia in 2020, told the Australian Financial Review in April that year that Chinese consumers could boycott Australian goods and services if Canberra continued to push for an independent inquiry into the origins of the covid-19 outbreak.

Relations have noticeably softened since the election of the Labor government led by Anthony Albanese in 2022.

The Australian government said in its statement: “[We have] been clear in our view that there is no justification for these duties and that it is in both countries’ best interest for all trade impediments to be removed.

“The Australian government will continue to pursue our national interests through dialogue and the multilateral trading system. We will use all opportunities, including the WTO dispute mechanism, to get the best outcomes for Australia’s world-class producers and farmers. This includes creating further opportunities for Australian business to diversify overseas markets.

“We remain confident in the outcome for Australian wine at the WTO. If today’s 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.

“The Albanese government’s approach has been to co-operate with China where we can, disagree where we must and engage in our national interest. This pathway reflects that approach.”