Australia is urging an end to all trade restrictions with China following the lifting of anti-dumping tariffs on Australian barley imports. The move comes as the two trading partners strive to normalize their commercial ties. China’s Ministry of Commerce announced that the anti-dumping and anti-subsidy tariffs on Australian barley would be lifted, marking the end of a three-year dispute that had severely impacted the bilateral trade relationship. The tariffs, which were as high as 80.5%, had led to a significant decline in the annual A$1.5 billion trade in barley between the two countries.
The lifting of the barley tariffs follows the resumption of trade in other products such as coal and timber, which has helped ease tensions between the two nations. However, there are still remaining restrictions on Australian products, including wine, which faces its own tariffs, as well as unofficial barriers on lobster and meat exports from specific abattoirs. Australian Trade Minister Don Farrell highlighted the importance of resolving these outstanding issues, stating that the barley decision could serve as a template for resolving the wine dispute.
The strained relations between Australia and China escalated in 2020 after Australia called for an inquiry into the origins of Covid-19, prompting retaliatory measures from Beijing, including the imposition of anti-dumping duties on Australian wine and barley. However, since the Labor party came to power in Australia last year, tensions have eased, leading to the resumption of coal and timber trade.
The lifting of the barley tariffs is seen as a positive step for the Australian wine industry, which had previously enjoyed an annual trade worth A$1.2 billion with China. However, there is still an ongoing complaint at the World Trade Organization regarding China’s tariffs of up to 218% on Australian wine.
The removal of the barley tariffs is expected to have a positive impact on Australian barley prices and farmers. Malt quality barley, in particular, is likely to attract a premium due to increased demand and concerns about potential reversals by China. Grain Producers Australia CEO Colin Bettles welcomed the removal of tariffs, emphasizing the benefits for Chinese consumers, the industry, and local exporters.
Following the announcement, the Australian dollar experienced a slight increase, demonstrating positive sentiment in response to the news. The decision also paves the way for a potential visit to Beijing by Australian Prime Minister Anthony Albanese, although no date has been set yet.
As the trade relationship between Australia and China gradually improves, both countries will continue to navigate the remaining hurdles in order to strengthen their economic ties. The lifting of the barley tariffs is a significant development, signaling progress in resolving trade disputes and opening new opportunities for cooperation.
