Australia and China Move to Resolve Barley Trade Row

Australia and China are working to patch up their trade disputes, with news on Tuesday of an agreement that seeks to resolve their row over barley imports.

Foreign Minister Penny Wong said on Tuesday Australia would suspend a case it lodged at the World Trade Organisation, while China hastens a review into duties imposed on the grain.

China imposed tariffs of 80.5% on Australian barley when relations between the two countries deteriorated in 2020, which all but wiped out imports of the grain by the world’s biggest beer market and prompted a formal complaint by Australia to the WTO.

At that point Australian barley exports to China had ranged from A$1.5 billion ($1 billion) to A$2 billion a year.

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Hope also for wine exports

“China has agreed to undertake an expedited review of the duties imposed on Australian barley over a three-month period, that may extend to a fourth, if required,” Wong told a news conference.

“In return, we have agreed to temporarily suspend the WTO dispute for the agreed review period.”

The government expects a similar result in a second dispute on wine tariffs, she added.

In a statement, Grain Producers Australia welcomed the move, which could speed up the resumption of the barley trade.

“This process to reach a resolution would be significantly shorter than if the WTO process continued,” chairman Barry Large said.

China’s Ministry of Commerce did not respond to a request for comment.

Just one of several sources of friction between the two nations in recent years, China’s anti-dumping and countervailing duties prompted its buyers to turn to Canada, France and other markets.

But prices of barley have fallen since the start of the year, partly on hopes that Australia will resume imports.

“Everybody is waiting for Australian barley to come,” said Yang Zhenglong, general manager at Malteurop China.

While most maltsters in China already have enough stocks for this year, resumption of trade in a few months time would allow Australia’s new barley crop, harvested from October, to reach China at the end of the year, he added.

Trade thaw with new government

Relations between the two nations deteriorated in April 2020 after former Australian Prime Minister Scott Morrison called for an investigation into the origins of the coronavirus – a stance that angered Beijing and appear to spur a bilateral trade war.

However, ties between Canberra and Beijing have warmed since the centre-left Labor party won power in Australia in May last year.

Wong met her Chinese counterpart Wang Yi in Beijing in December, on the first such visit by an Australian minister since 2019.

On Monday, China said Ma Zhaoxu, a vice foreign minister, would visit Australia and Fiji this week to hold a new round of “political consultations”.