Australia will formally request the World Trade Organization (WTO)’s mediation to resolve an ongoing trade dispute with China, Australia’s trade minister announced Wednesday.
“Australian officials … advised their Chinese counterparts of Australia’s intention to request formal consultations with China in relation to the application of anti-dumping and countervailing duties against the Australian barley industry. We will make those formal requests through the WTO tonight,” Australian Trade Minister Simon Birmingham said at a press conference on December 16.
China said in May it would impose anti-dumping and anti-subsidy duties totaling 80.5 percent on Australian barley for the next five years. The tariffs have effectively halted a billion-dollar trade exchange in its tracks.
“Australia is the biggest barley supplier to China, exporting about A$1.5 billion to A$2 billion ($980 million to $1.3 billion) worth a year, which is more than half its exports,” according to Reuters.
Australia is expected to produce nearly 12 million metric tons of barley this crop year, creating a surplus of the cereal after rains revived some of the country’s largest barley growing regions following years of drought. Canberra must now find alternative export markets for the grain, used for both brewing and animal feed.
“There aren’t many alternative markets. It could be sold to Saudi Arabia, but it will be heavily discounted to what Australian farmers could have received by selling to China,” an Australian government source told Reuters in May. “By contrast, China – the world’s top barley importer – will simply shift purchasing to other key producers, including France, Canada, Argentina and some smaller European exporters.”
In justifying the tariffs, China’s Ministry of Commerce said it had confirmed dumping by Canberra and significant damage to China’s domestic industry as a result of Australia allegedly subsidizing local barley production. The Australian government denies the allegations and said on Wednesday it has now been forced to seek formal intervention on the matter from the WTO.
“Australia has an incredibly strong case to mount in relation to defending the integrity and proprietary of our grain growers and barley producers,” Birmingham said at Wednesday’s press conference.
China imposed the barley tariffs one month after Australia voiced public support for an independent probe into the origins of the Chinese coronavirus in April. The coronavirus was first recorded in the central Chinese city of Wuhan late last year, and Beijing has been accused of obfuscating key information surrounding its initial outbreak.
The WTO suit threatens to further deteriorate relations between Australia and China, which have increasingly frayed since April. China has imposed new tariffs on a range of other Australian commodities besides barley, including wine, and diplomatic communication between the two parties has grown tense and limited.
China’s state-run Global Times responded to the suit’s announcement on Wednesday, claiming that, “In view of fierce frictions between the two countries, it’s no surprise that Australia has taken such action. It’s believed Beijing must have prepared for this and has the confidence to win the suit.”
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