China Drops Tariffs on Australian Barley, Repairing Strained Ties
China’s Ministry of Commerce has announced that it will lift anti-dumping and anti-subsidy tariffs on Australian barley imports, bringing an end to a three-year trade dispute between the two nations. This move comes as China and Australia work towards repairing their strained bilateral ties. The decision to drop the tariffs will take effect starting on Saturday, with China’s Ministry of Commerce citing changing market conditions in the country without providing further details.
The removal of these tariffs is a significant step in resolving the dispute over barley imports. In April, China and Australia reached an agreement to settle the issue, with Australia suspending its case at the World Trade Organization (WTO) over Beijing’s anti-dumping and countervailing duties on barley. In return, China promised to fast-track its review of the tariffs.
The elimination of these tariffs has implications beyond the barley industry. It also highlights the remaining Australian products that are still subject to restrictions in China, including wine, which also faces tariffs, as well as informal restrictions on lobster and meat exports from certain abattoirs.
Australian ministers expressed their satisfaction with this outcome, emphasizing the importance of the WTO dispute mechanism in protecting the interests of Australia’s producers and farmers. They also called for a similar process to be followed in removing the duties on Australian wine. The decision to drop the tariffs is expected to have a positive impact on Australian barley prices and farmers, particularly those involved in producing malt quality barley, who are likely to command a premium.
Following this announcement, the Australian dollar experienced a slight increase in value. The decision is seen as a win not only for Australian exporters but also for Chinese consumers and industry.
The strained relations between China and Australia began escalating in 2020 after Australia called for an investigation into the origins of COVID-19. This led to retaliatory measures by China, including imposing anti-dumping duties on Australian wine and barley. China imposed tariffs of up to 80.5% on Australian barley, effectively halting imports of the grain, which had been worth around A$2 billion annually.
Since the center-left Labor party took power in Australia, tensions between the two nations have gradually eased. China resumed importing Australian coal in January after nearly three years, and in May, it announced that it would once again import Australian timber.
Cautious optimism surrounds the lifting of the barley tariffs, as it is seen as a positive step towards further improving the relationship between China and Australia. Australian officials hope that this decision may set a precedent for the removal of duties on Australian wine as well.
Moving forward, it is anticipated that trade flows will shift again as Chinese buyers return to purchasing Australian barley. The arrival of the new Australian barley crop, harvested in October, is expected to attract significant demand from China.
In conclusion, the dropping of tariffs on Australian barley by China marks a turning point in their trade dispute. This move not only benefits Australian barley farmers and exporters but also signifies a positive development in the overall relationship between the two countries.
