Deadline looms for decision on $1.2b China barley trade, with Australia expecting China to lift tariffs

The federal government expects Chinese tariffs on Australian barley exports to be lifted soon, but there is no word yet from Chinese authorities.

China imposed massive tariffs on Australian barley imports in May 2020, citing concerns about the dumping of cheap grain.

The 80 per cent tariffs effectively shut down the trade worth $1.2b to Australian growers.

Australia took the matter to the World Trade Organization (WTO), but in April this year, that case was suspended just as a decision was due to hand down.

The government said it preferred to resolve the issue bilaterally and gave the Chinese government three months to respond.

That timeline was extended by a month, and a response was due on August 11.

Assistant Minister for Trade Tim Ayres said he expected this report would mean that China would lift the tariffs that have been placed on barley.

“In the absence of removing those impediments, the Australian government has made it very clear that we’ll  resume the WTO application.”

He said there was no appetite for any further extension of time.

“These impediments should never have been put in place.

“It’s hurting in some communities and for our barley exporters, and it is very bad for the Chinese beverage industry.”

Grain growers have scrambled to find new markets for barley since the tariffs were introduced.

The price of barley fell $30-40/tonne at the time, so a resumption of trade with China could see prices surge providing a huge boost to the sector.

Andrew Weidemann, a Victorian grain grower and spokesperson for Grain Producers Australia, said 6m tonnes of barley went to China at the peak of the trade.

He said the industry did not support the decision to take the issue to the World Trade Organisation, but if it can’t be solved by negotiation, he thinks it will have to go back there.

“It would extend the process for purchasing even if there is a positive result in the World Trade process.”

Chinese buyers are currently paying more for lesser-quality barley from other countries.

Mr Wiedemann said there had been a lot of interest in Australian barley from the Chinese, but the tariffs need to be removed.

Tags: World Trade Organization, Australia, China, exports, grain, barley, WTO, imports, tariffs