Australia takes China barley tariffs dispute to trade umpire

Sarah IsonThe West Australian
The tariffs on Australian barley have hurt many growers left scrambling to find new markets.
Camera IconThe tariffs on Australian barley have hurt many growers left scrambling to find new markets. Credit: Danella Bevis/Countryman

Australia will take China to the World Trade Organisation tonight over its hefty tariffs on barley imports.

Beijing slapped an 80.5 per cent tariff on Australian barley in May, alleging growers were “dumping” product on the Chinese market by exporting it at lower prices than was charged on its home market.

In September, China banned WA grain handler and exporter CBH altogether, claiming to have discovered “excessive weed seeds”.

Both claims have been denied by the Federal Government, which has up until now urged China to “come to the table” and resolve the issues.

But today, Trade Minister Simon Birmingham confirmed those calls had gone unanswered and Australia would be taking China to global umpire, the World Trade Organisation, tonight.

“We ask the independent umpire to adjudicate and ultimately help settle those disputes,” he said.

“We again extend the important offer of dialogue and discussion as an off-road, and off-ramp to this dispute.”

Senator Birmingham said the WTO process was “not perfect” and could take years.

“They take longer than would be ideal, but ultimately, it is the right avenue for Australia to take at this point in time,” he said.

“This is about achieving, as much as anything, a systemic outcome as well as a specific outcome.”

In releasing the company’s annual results yesterday, CBH chief executive Jimmy Wilson that the co-op was reluctant to detail its thinking around China, but said there was no indication of the sanctions being widened from barley to other Australian grains.

“We are hoping that won’t occur. Obviously, we plan for the worst and hope for the best,” Mr Wilson said.

He said yesterday CBH was ready to help if the Federal Government called on the World Trade Organisation to investigate the barley dispute.

The WTO is now expected to enter a consultative first phase over a couple of months where both countries will be “forced to engage” in consultation and remediation to see if the trade dispute can be resolved.

Should that fail to produce an outcome, a WTO panel will consider the arguments from both parties and form a judgment, which can then be appealed by either country.

Senator Birmingham said he hoped the formal action against the economic superpower would provide “a systematic check” on China and provide greater certainty in the long run for other sectors and other countries dealing with Beijing.

“What is going to be required here is from Australia, a period of calm, consistency and patience and for China, we hope, to be willing to come to the table,” he said.

It comes as a Chinese official overnight said he was “unaware” of reports by State-run media that Beijing was moving to ban Australian coal imports, blaming Australia for “playing the victim”.

Senator Birmingham said Australia would welcome other countries participating in the WTO process triggered today.

“Australia is not the first country to see China apply different trade sanctions against … without apparent justification,” he said.

“It is quite common for other countries to become third party to proceedings in the WTO, Australia has done so on many occasions… we anticipate that others would do so on this occasion.”

He confirmed Australia would “consider further action” against China’s tariffs of more than 200 per cent on wine, and potentially bring similar complaints to the WTO as it will tonight over the tariffs on barley.

Senator Birmingham would not confirm how much the trade tensions were costing Australia, and said the figure would boil down to “just where China chooses to take this”.

“The costs obviously affect trade volumes that are in the billions of dollars but there will be alternative markets for many of those item,” he said.

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