By Rachel Clun
China has agreed to fast-track a review of trade bans on Australian barley exports in a significant step towards the easing of restrictions on $20 billion worth of Australian products.
Ahead of Trade Minister Don Farrell’s first trip to China in the coming weeks, Australia has agreed to temporarily suspend its World Trade Organisation dispute while China spends the next couple of months reviewing the barley restrictions.
China has agreed to fast track a review of its high tarrifs on barley, as Australia pauses its WTO dispute over the embargo.Credit: Bloomberg
Foreign Minister Penny Wong said if China removes the up to 80 per cent tariffs from barley following the review, Australia expected a similar review and removal of restrictions on Australian wine would follow.
“The reason we are going down this path is because the Australian Government wants to see these impediments, these tariffs lifted as soon as possible. That’s the intention,” Wong said at a press conference in Adelaide on Tuesday.
“If this agreement is successful in providing a pathway for the lifting of duties on barley, the Australian government would expect a similar process to be followed in relation to the trade barriers which exist on Australian wine.”
But, Wong said, Australia reserves the right to return the dispute to the World Trade Organisation if it is not resolved in the coming months.
China remains Australia’s largest two-way trading partner – last year, trade with China was worth nearly $300 billion. But official and unofficial restrictions on goods from beef and wine to coal, timber and lobster following a breakdown of relations early in the pandemic has hampered about $20 billion worth of trade.
The relationship has been slowly thawing over the last year, with an official visit to China from Wong in December preceding the first shipments of Australian coal entering Chinese ports.
Last month Assistant Trade Minister Tim Ayres travelled to China as Chinese state-run media outlet The Global Times reported that the timber trade had also recently resumed. Victorian Premier Daniel Andrews travelled to China at the end of March, and WA Premier Mark McGowan has a visit planned for later in April.
Trade Minister Don Farrell is expected to follow in coming weeks, after holding a virtual meeting with Chinese Commerce Minister Wang Wentao in February.
On Tuesday, Farrell said Australia’s preferred way of resolving the disputes was through dialogue.
“We are hopeful that at the end of that review process, that the impediments that currently exist, will be suspended and removed and that we can get back to normal trade with China,” he said.
“We hope that this will be a template for then moving on to the other areas of dispute.”
Opposition foreign affairs spokesman Simon Birmingham and opposition trade spokesman Kevin Hogan said they were cautiously optimistic about the review, but the tariffs on barley and wine should never have been imposed to begin with.
“Any genuine review should lead to the full removal of the tariffs that China imposed on Australian barley. Australia should be expecting nothing less,” they said in a statement.
“Given our comprehensive agreements made to one another and mature trade relationship, China’s previous refusal to engage in dialogue was always counterproductive.”
Cut through the noise of federal politics with news, views and expert analysis from Jacqueline Maley. Subscribers can sign up to our weekly Inside Politics newsletter here.