In a major breakthrough, Australia and China have reached an agreement to end a long-standing trade dispute over barley imports. The lifting of the tariffs - due to take place after a review period - will allow Australian barley growers to compete on a level playing field with other producers in the world market.
In May 2020, the Chinese government imposed tariffs of up to 80% on Australian barley imports, citing allegations of dumping and subsidies. (inside.beer, 11.5.2020). This act not only caused significant losses for Australian barley farmers but also distorted barley flows around the globe as Australian barley was suddenly uncompetitive in one of their largest markets. Before the dispute arose, the country had been the largest export market for Australian barley, with a value of about USD 1.2-1.5 billion per year.
Conversely, Chinese malt houses such as Supertime and COFCO, with a combined annual requirement of more than 2.2 million tons of malting barley, suddenly had to look for new suppliers. The increased Chinese demand for barley from Europe, Canada and South America in turn had consequences in these markets.
The Australian government unsuccessfully appealed the decision to the WTO, dismissing China's claims that Australia had used subsidies to distort the market.
On Friday, China’s Ministry of Commerce (MOFCOM) finally said it will review its anti-dumping and anti-subsidy duties on barley imports from Australia, in a move toward to reduce trade tensions between the two nations.
Starting from April 15, 2023, any interested party may submit comments in writing and provide corresponding evidence within 20 days. After this review period, China will take a decision.
The resolution of this dispute can set a precedent for other trade disputes between the two countries, including China rolling back its market restrictions on the import of Australian wine.