Australia-China dispute over barley tariffs to land in WTO

By: AFP      Published: 12:53 PM, 16 Dec, 2020
Australia-China dispute over barley tariffs to land in WTO

Australia said Wednesday it will ask the World Trade Organization to probe Chinese tariffs on barley imports, ramping up tensions between the two a day after Canberra hit out at a reported ban on coal exports as a breach of WTO rules.

The move would mark the first time Australia has taken a complaint to the group but Trade Minister Simon Birmingham warned further actions could follow in other sectors as relations between the trading partners continues to sour.

He said Beijing's 80 percent surcharge on barley shipments from Australia "lack basis" and "are not underpinned by facts and evidence".

"We are highly confident that based on the evidence, data and analysis that we have put together already, Australia has an incredibly strong case," Birmingham added.

China argues that the grain is produced with government subsidies and sold below cost, so is subject to anti-dumping duties.

Australia's barley exports to China had been worth around US$1 billion a year before a recent drought, and are used most notably in beer-making.

Industry body GrainGrowers Australia welcomed the decision and said Chinese tariffs could cost the sector around US$1.9 billion over the next five years.

Experts say Beijing has been considering restricting Australian barley imports since 2018 owing to worries that China -- which produces only around 20 percent of what it needs of the crop -- is overly dependent on imports.

Australia-China relations are at their lowest ebb since the 1989 Tiananmen Square crackdown, with Beijing rolling out a string of economic sanctions against Australian products.

Each dispute has been billed as a technical issue, but many in Canberra believe the sanctions are retribution for Australia pushing back against Chinese influence at home and in the Asia-Pacific, as well as its call earlier this year for a probe into the origins of the coronavirus.

At least 13 Australian sectors have been subjected to tariffs or some form of disruption, including beef, coal, copper, cotton, lobsters, sugar, timber, tourism, universities, wine, wheat and wool.

On Tuesday, Prime Minister Scott Morrison said Beijing had yet to confirm state media reports that Australia's multibillion-dollar coal exports are now subject to an informal ban.

The Global Times said Sunday that power plants were being steered toward buying their coal domestically, as well as from countries other than Australia.

"If that were the case, then that would obviously be in breach of WTO rules," Morrison said. "It would be obviously in breach of our own free-trade agreement and so we would hope that is certainly not the case."

The tensions have called into question Australia's highly successful economic model -- based on supplying the raw materials for China's breakneck emergence as a modern economy.

China's foreign ministry on Tuesday said that any trade measures taken against Australia were "in line with China's laws and regulations and international practices. They are also responsible steps to safeguard the interests of domestic industries and consumers".

"Recently we've seen many reports in which Australia dresses up as a victim, pointing an accusing finger at China, directly or by insinuation. This move is meant to confound the public and we will never accept it."

Australia had until now shied away from taking the disputes to the Geneva-based organisation, fearing resolution could take years, open Australia up to retaliatory claims and worsen relations further.

But Birmingham said: "We have a series of different actions that China has taken during the course of the year and each come with slightly different criteria for how you might respond at the WTO."