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After an 18-month investigation, China imposed a total tariff of 80.5 per cent on Australia’s barley exports in May, made up of an anti-dumping duty of 73.6 per cent and a countervailing or anti-subsidy levy of 6.9 per cent. Photo: Bloomberg

China-Australia relations: Beijing blocks ‘premature’ move to set up WTO probe into Australian barley tariffs

  • China imposed an 80.5 per cent tariff on Australia’s barley exports in May last year following the conclusion of an 18-month investigation
  • Australia filed a complaint with the World Trade Organization (WTO) in November, but China rejected the request to form a panel on Wednesday – a move that will only delay the process

China as expected blocked Australia’s first request to establish a World Trade Organization (WTO) panel to investigate Beijing’s anti-dumping and countervailing duties imposed on imports of Australian barley.

It imposed an 80.5 per cent tariff on Australia’s barley exports in May following the conclusion of an 18-month investigation, with the WTO confirming that Canberra filed a complaint with the Geneva-based body in November.

According to a Geneva trade official, Australia said at Wednesday’s meeting of the WTO’s dispute-settlement body that China’s measures were “inconsistent” with WTO rules on the use of anti-dumping and countervailing measures, insisting that “no concrete steps” had been taken to respond to its concerns.

China responded that it was “not in a position” to agree to Australia’s “premature” request, as Beijing has been engaging in constructive and good-faith talks with Canberra both during and after the WTO consultations, and was willing to continue its engagement.

09:20

Trade ‘only one part of the battle‘ in China-Australia dispute, says legal expert Bryan Mercurio

Trade ‘only one part of the battle‘ in China-Australia dispute, says legal expert Bryan Mercurio

China also insisted that its authorities had conducted its investigation in a fair, thorough and transparent manner.

The move from China was expected, although it is only set to delay the process, with a panel almost certain to be established at the next meeting of the WTO’s dispute-settlement body in May.

It is common for recipients of complaints to reject panel-formation requests at the WTO in the first instance, when such requests must be passed by a consensus, with defendants effectively holding veto power.

But in the second instance, the requirement is flipped, with a consensus against the panel’s formation required to block it. 

China-Australia relations: what’s happened over the past year, and what’s the outlook?

China’s 80.5 per cent tariff comprises an anti-dumping duty of 73.6 per cent and a countervailing or anti-subsidy levy of 6.9 per cent, rendering Australian barley exports uncompetitive in China after the duties imposed were at the highest end of possible penalties.

Australia previously claimed that China deviated from WTO rules 26 times during its anti-dumping investigation, including improperly using third-party country sales data to justify that Australia had dumped cheap barley.

“Australia’s barley trade with China represents a great deal of hard work on both sides over many years. The anti-dumping and countervailing duties imposed on Australian barley exports are not consistent with China’s WTO obligations,” said Dan Tehan, Australia’s minister for trade, tourism and investment, in a statement in March after informal talks over the anti-dumping dispute broke down.

“The [Australian] government is committed to defending the interests of Australian barley producers.”

02:01

Australia seeks WTO mediation on China barley tariffs

Australia seeks WTO mediation on China barley tariffs
Last week marked the one-year anniversary of the ongoing trade tensions between China and Australia, which started with Canberra’s call for an inquiry into the origins of the coronavirus pandemic, and have led to Beijing targeting a number of other Australian exports including beef, wine, lobsters and coal.
In March, China also placed anti-dumping duties of between 116.2 per cent and 218.4 per cent on Australian wines in containers of two litres or less after concluding its anti-dumping investigations.

In the case of its wine investigation, China’s Ministry of Commerce said it had “conducted investigations in strict accordance with relevant Chinese laws and regulations and [World Trade Organization] rules, and made the final ruling”.

Australian exports of wine to China have almost completely dried up since the duties were imposed.

Shipments in the first three months of the year plummeted to just A$12 million (US$9.3 million) from A$325 million in the same period a year earlier, Wine Australia said on Thursday. China used to be Australia’s biggest wine export market.

The slump in China was too steep to compensate for increased shipments from Australia to Britain, Germany and New Zealand with the value of Australia’s total wine exports falling 4 per cent to A$2.77 billion (US$2.1 billion) in the year that ended in March.

Additional reporting by Bloomberg

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