China has asked for an additional month to determine whether it will remove hefty tariffs imposed on Australian barley, dealing a blow to expectations of a quick breakthrough in one of the largest trade disputes between the two countries, The Guardian reported.
The Australian government expressed disappointment with the delay and warned that it is prepared to bring the case back to the World Trade Organization (WTO) if Beijing does not lift the measure by August.
The failure to reach a deal would also impact Australian wine exporters, as the government had anticipated that the barley review would serve as a model to resolve similar issues in the wine sector.
China had imposed tariffs of 80.5% on Australian barley during heightened diplomatic tensions in 2020, resulting in the loss of a previously thriving trade worth $1.2 billion annually. (inside.beer, 11.05.2020)
The three-month period allocated for China to reconsider the barley tariffs, in exchange for Australia suspending its WTO challenge, ended on Tuesday. China and Australia have informed the WTO dispute panel that they have agreed to extend the suspension by one month, until August 11.
However, spokespeople for the foreign affairs minister, Penny Wong, and the trade minister, Don Farrell, indicated that Australia will not grant any further extensions.
"The Australian government has consistently maintained that there is no justification for these duties and that it is in the best interest of both countries to remove all trade barriers," the spokesperson stated. "While we are disappointed that China's review could not be completed within the initial three months, we remain hopeful that the barriers will be lifted in the near future. If the duties are not lifted at the end of the four-month period, Australia will resume the dispute at the WTO."
Should Australia revive the WTO challenge, the process would resume from the point at which it was paused, rather than starting from scratch. The final report from the dispute panel was expected soon.
As part of the deal announced in April (inside.beer, 14.4.2023), China's commerce ministry had committed to an expedited review of the barley tariffs, presenting an opportunity for Beijing to eliminate the measure without risking a negative ruling from the WTO.
While Wong and Farrell had previously acknowledged the possibility of the review extending into a fourth month, the delay is viewed as a setback as the Australian government has been striving for concrete progress in the trade disputes.
The Australian government had been seeking improved conditions for a potential visit to China, the country's largest trading partner, by Prime Minister Anthony Albanese, although recent reports suggest that the trip may be postponed until next year.
In the past six months, China has taken steps to ease tensions, including resuming imports of Australian timber, coal, and stone fruit. However, Australian barley, wine, seafood, and red meat continue to face restrictions.
Before the extension on barley tariffs was confirmed, Kevin Hogan, the opposition's trade spokesperson, emphasized that the only acceptable resolution from the review process is the complete and unconditional removal of the tariff on barley.