Australia hits back at China over barley tariffs

Australia has resolved to take action against China in an international forum as the relationship between the two nations deteriorates.

Australia will take China to the independent trading umpire over tariffs slapped on Australian barley.

The challenge comes amid reports China has black-listed Australian coal imports as the trade dispute between the two nations deepens.

Beijing imposed a massive 80 per cent tariff on Australian barley imports in May after an investigation accused producers of importing products at a lower price.

Trade Minister Simon Birmingham said the government would make a formal request to the World Trade Organisation on Wednesday night.

“We do not agree with China’s decision to impose anti-dumping and countervailing duties on Australian barley,” Senator Birmingham said.

“We remain disappointed that China has not engaged with Australia to address these concerns and now believe that calling in the independent umpire is the most appropriate course of action to resolve this dispute.”

Trade Minister Simon Birmingham said Australia was not the first country to see China apply different trade sanctions against them. Picture: NCA NewsWire/Gary Ramage

However, he did warn it could take years to resolve the dispute.

“This is not the first time, even in my stint as Australia’s trade minister, that we have taken such action,” Senator Birmingham said.

“Australia has a current dispute with India in relation to the sugar industry, we have had a dispute with Canada in relation to the wine industry, which importantly we have ultimately resolved without having to use all of the WTO processes.”

Barley exports to China were worth more than $1 billon before China launched an investigation in November 2018.

The federal agriculture department estimates the gross value of barley production would be almost a third lower in 2025 than it would have been without the tariff.

This is due to reduced barley planting and lower prices.

National Farmers’ Federation president Fiona Simson said she supported the move to refer China to the WTO because there were signs the rules had been breached.

“We believe this is the case with respect to anti-dumping and countervailing tariffs imposed on Australian barley,” she said.

Opposition treasury spokesman Jim Chalmers also backed the move saying it was an important way to advocate for exporters’ interests,

The trade relationship between Australia and China has been strained throughout 2020.

China last week slapped a sixth Aussie beef exporter with trade restrictions, on top of customs clearance issues imposed across goods in several industries, including wine and seafood.

Senator Birmingham was also asked whether the government could refer China to the WTO over informal instructions for businesses not to buy Aussie goods, such as cotton.

However, he said those instructions were harder to prove and made doing business with China riskier.

“The costs obviously affect trade volumes that are in the billions of dollars but there will be alternative markets for many of those items,” Senator Birmingham said.

“That heightened risk profile is one that all businesses around the world potentially face, meaning it is a bad outcome for China and Chinese economy as well as for economies like ours around the world.”

Senator Birmingham, who was recently promoted to finance minister, is expected to lose the trade portfolio during a ministerial reshuffle later this week.

“If these are my final days, I will not throw diplomacy out the door,” he said.