China agrees to scrap barley tariffs, ending three year spat

After three years of tension and challenges, Beijing will immediately wind back its tariffs on a major Australian export.

China has agreed to scrap its sanctions on Australian barley, ending a three year rift.

The 80 per cent tariffs, first imposed in 2020 at the height of diplomatic tensions between the two countries and later subject to a lengthy World Trade Organisation challenge, will be removed from Saturday.

Foreign Affairs Minister Penny Wong and Trade Minister Don Farrell – both of whom have travelled to Beijing in recent months to repair the relationship – made the announcement on Friday afternoon.

“This is the right outcome for Chinese consumers and Australian producers,” Senator Wong told reporters.

Senator Farrell, who Senator Wong said had “steered the management of this dispute with great success”, said China’s decision was a “positive step in the full resumption of normal trade”.

The announcement is likely to pave the way for Prime Minister Anthony Albanese to finally travel to China this year.

But when he was asked whether he would now go to Beijing, he did not answer.

“I welcome the decision that has been made,” he said at a press conference from Garma festival in the Northern Territory.

“I have said very plainly on China, that we will co-operate where we can and disagree where we must, but will engage in our national interest.

“This is a very positive decision.”

Foreign Minister Penny Wong and Trade Minister Don Farrell welcomed China’s announcement it would scrap its barley tariffs. Picture: NCA NewsWire / Kelly Barnes

The National Farmers Federation heralded the move, saying the scrapping of tariffs was welcome news for some 23,000 grain producers caught in the crossfires.

“The Australian farming sector was always of the view there was no justification for these duties and that it was in both countries’ best interest for all trade impediments to be removed,” chief executive Tony Mahar said.

“Today’s announcement is a positive outcome and another step in the right direction to resuming full trade with an important market for Australian agriculture.

“This development is in the long-term interests of Australia and China and highlights the positive effect of meaningful collaboration.”

China will remove its 80 per cent barley tariff from Saturday.

China’s decision came after Australia in April agreed to suspend its WTO challenge, in exchange for Beijing agreeing to review the tariffs within the next few months.

Australia stipulated it was prepared to resume the challenge if Beijing did not agree to scrap the tariffs.

Senator Farrell said China’s decision “demonstrates the importance” of WTO processes in “resolving and defending Australia’s world class producers and farmers”.

“I’ve consistently said that we would prefer to resolve all of our disputes with China through discussion and dialogue rather than disputation,” he said.

“In this case, the dialogue and the goodwill, and I must say the patience and the persistence, have proven effective in helping Australian barley growers and exporters to achieve an expedited outcome.”

The news is expected to not only be welcome news to Australian barley growers, but winemakers who are hopeful China will soon scrap its tariffs.

Senator Farrell said the government intended to use the successful template it had used to wind back the barley restrictions to resolve ongoing wine issues.

Anthony Albanese has said he hopes to visit Chinese President Xi Jinping in China later this year. Picture: Twitter

Senators Wong and Farrell said they remained steadfast in their commitment to get wine tariffs repealed.

“We will continue to work consistent with the WTO system to stand up for the rights of Australia and exporters while resolving differences of trade matters,” Senator Wong said.

“In the meantime, we are continuing to pursue our wine dispute at the WTO, and remain confident in a positive outcome,” the pair said in an earlier statement.

“The Australian government’s approach has been to co-operate with China where we can, disagree where we must and engage in our national interest. The outcome on barley reflects that approach.

“We will continue to press for all trade impediments affecting Australian exports to be removed, which is in the interests of both Australia and China.”

The federal opposition welcomed the announcement, but Simon Birmingham and Kevin Hogan said the government must use the improved relations with China to apply “every possibly lever it can for the release of unfairly detained Australians Ms Cheng Lei and Dr Yang Jun”.

“The lack of transparency in relation to those detained Australians is completely unacceptable and we should continue to seize every opportunity to prosecute their cases for them to return home to their families,” the pair said.