China has decided to lift a 3-year tariff on Australian barley, signaling an improvement in bilateral trade since Australia’s government changed. In May 2020, China imposed an 80.5% tariff on Australian barley after the previous Australian government called for an independent inquiry into the origins and responses to the COVID-19 pandemic, angering Beijing. However, on Friday, both governments confirmed the resumption of trade in barley, which had been worth 916 million Australian dollars ($602 million) before China blocked imports.
The breakthrough has been warmly welcomed by Australian Prime Minister Anthony Albanese, who sees it as a positive decision. He plans to visit Beijing as government leader before the end of the year. When Albanese’s government was elected in May 2022, he demanded that Beijing remove various trade barriers against Australian exports, including barley, wine, coal, beef, wood, and seafood, which were costing Australian producers $15 billion annually.
China’s Ministry of Commerce stated that it ruled in view of the changes in China’s barley market, it was unnecessary to continue to impose anti-dumping duties and countervailing duties on imported barley originating in Australia. However, no details of the decision were provided, and China did not explain the market changes that influenced its move.
Australia has consistently denied China’s allegations of subsidizing barley and wine for export at artificially low prices, known as dumping. In April, Australia suspended a complaint with the World Trade Organization in an effort to reopen the Chinese market to barley. As part of the agreement, China had agreed to reexamine its duties on barley. Now that the barley trade has been reopened, the Australian government expects China to lift its trade barriers on Australian wine as well. However, Australia’s complaint regarding wine remains pending at the Geneva-based WTO.
China is Australia’s largest trading partner, with two-way trade totaling $287 billion in 2022. The resumption of barley trade marks a positive step in the bilateral trade relationship between the two countries but does not resolve all the ongoing issues. The lifting of the tariff could potentially lead to further negotiations to tackle the remaining trade barriers imposed by China. The development is significant for Australian barley producers who have faced considerable challenges due to the restrictions. Australia will now look forward to expanding its agricultural exports and strengthening its economic ties with China.
