China relations sour over tariff threat to Australian barley

Australia's souring relations with China have grown more bitter with the Morrison government given 10 days to stop the nation's barley producers being slapped with tariffs of up to 80 per cent.

Trade Minister Simon Birmingham said he was deeply concerned that "unjustified duties" may be imposed on Australia's barley exports which last year reached a drought-affected $600 million.

The nation's barley producers have been given 10 days to respond to a determination by China's Ministry of Commerce which has been conducting an anti-dumping investigation into Australian grain imports since 2010.

The ministry is considering two separate tariffs of 73.6 per cent and 6.9 per cent on Australian barley shipped to China.

China has alleged that Australian farmers produced barley at a price lower than its "normal" level through 2014, 2015 and 2016, undermining local producers.

The ministry's move comes as relations between Australia and China have deteriorated in the wake of the coronavirus pandemic. Australia wants an independent investigation into the origin of the virus.

Australian barley producers have been given 10 days to fight proposals by China to impose tariffs worth 80 per cent on barley imports. Credit: Not for syndication

Senator Birmingham said Australian barley producers, largely from Western Australia and South Australia, operated in a competitive global market without any trade distorting subsidies.

"We have worked with the Australian grains industry to mount the strongest possible case against China’s anti-dumping investigation," he said.

Trade Minister Simon Birmingham says China's dumping claims are baseless.Credit: Alex Ellinghausen

"We will use the remaining time before China finalises it’s decision to continue our efforts to resolve this matter satisfactorily and will seek to uphold the integrity of our world leading barley producers.

"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."

While Australia has launched anti-dumping cases against China, this is the first started by China against Australia.

If China moves, Australia would likely appeal the move that could see the issue dragged out for several years before a resolution. Australia is confident any international determination on the case would come in its favour.

Organisations representing the Australian grains industry said in a statement they would co-operate with the Chinese government and work with the Australian government to deal with the issue.

WA Agriculture Minister Alannah MacTiernan said the move could not come at a worse time for her state's farmers who were just starting to seed this year's crop.

She said the WA government would directly lobby the Chinese consul-general on the issue which was a substantial threat to the state's farmers as they had few other markets for their high-quality malting barley.

“We strongly believe there are no grounds for the claims that Australian barley is being dumped or subsidised in the Chinese market," she said.