Australia threatens WTO action against China as trade row deepens

Australia threatens WTO action against China as trade row deepens
Simon Birmingham


Australia is preparing to take action against China at the World Trade Organisation (WTO) over tariffs on barley imports, the latest salvo in a trade dispute that has disrupted the supply of commodities from coal to wine.

China in May placed tariffs of 80.5% on Australian barley–commonly used for beer brewing–saying it was being sold at unfairly low prices with the help of subsidies. Australia rejected that finding and directly appealed to Chinese authorities to reverse the duties, but was rebuffed.

“So now the WTO appeal for barley is the next step,” Australian Trade Minister Simon Birmingham said on Sunday. The government is holding talks with the local grains industry and other sectors to gauge support for filing a complaint, he added.

China’s government didn’t immediately respond to a request for comment.

Australia drew China’s anger in April when it sought support from European leaders to investigate whether Beijing’s early response to the coronavirus contributed to the pandemic. Many Australian lawmakers and economists see the tariffs as retaliation by China for that diplomatic push.

Days before the barley tariffs were imposed in May, China said it had suspended beef imports from four Australian exporters, citing inspection and quarantine violations. Trade frictions have since broadened to a range of other Australian products. On Friday, China imposed anti-dumping tariffs on imports of Australian wine following a Ministry of Commerce investigation that began in August.

Australia has rejected Chinese claims that it is selling products below cost on international markets.

“If you stand by the rules-based system, you should also use that rules-based system, which includes calling out where you think the rules have been broken and calling in the international umpire to help resolve those disputes,” Birmingham said.

Australian barley exports to China were worth around $1 billion annually before Beijing decided to impose tariffs, according to analytics firm IHS Markit.

Escalating trade frictions are driving efforts by Australian producers to become less reliant on China, which previously bought around 70% of the country’s barley exports. Shipments of Australian barley were stable in the three months through September, even though exports to China mostly ceased after the tariffs were introduced, as producers sent more cargoes to Japan, Qatar and Thailand, according to government data.