Australia takes China to WTO over barley tariffs

Canberra is referring China to the World Trade Organization over Beijing’s imposition of punitive tariffs on Australian barley imports, escalating a bitter diplomatic and trade dispute.

Simon Birmingham, Australia’s trade minister, said on Wednesday that Canberra reserved the right to appeal several other Chinese trade sanctions levied against Australian coal, beef, timber and lobsters in recent months to the WTO.

In May, Beijing imposed tariffs of 80 per cent on Australian barley, alleging imports were sold below cost in China and that Canberra had subsidised growers in contravention of WTO rules. Canberra rejects the claims and warns the tariffs risk crippling a A$2bn ($1.5bn) a year industry.

“This is the logical and appropriate next step for Australia to take. We have been a longstanding defender of the international rules-based system, of the importance of multilateral co-operation and engagement,” said Mr Birmingham.

“In doing so it is appropriate that, when we argue for there to be international rules and an independent international umpire to resolve disputes, that when we find ourselves in the case of having such disputes we call in the umpire.”

However, Canberra has acknowledged that the WTO process could take years to resolve and noted that Beijing had refused to engage with it over the expanding range of trade disputes.

China is Australia’s largest trade partner, with two-way trade totalling A$252bn in 2019. But over the past two years, relations have soured as Canberra has resisted Beijing’s more aggressive foreign policy.

A memo leaked to Australian media last month by a Chinese diplomat cited Canberra’s ban on Huawei from the country’s 5G network and “disinformation” about China’s handling of coronavirus as among the reasons for the sharp deterioration in diplomatic ties.

Beijing has already imposed sanctions on barley, beef and wine imports following Canberra’s call for an inquiry into the origins of the Covid-19 pandemic that first surfaced Wuhan.

This week, Chinese state media reported authorities had banned Australian coal imports, targeting a sector that generated A$55bn in exports earnings in 2019. Dozens of Australian ships carrying coal remain stranded off the Chinese coast because of informal restrictions, according to the Australian coal industry.

Analysts said there was growing evidence that Beijing was using economic coercion to pressure Australia and send a warning to other nations in the region about the risks of publicly criticising the Chinese government.

On Tuesday, Beijing said it was not aware of any formal ban issued on Australian coal and defended recent measures taken against Australian imports as “in line with China’s laws and regulations and international practices”. 

“They are responsible steps to safeguard the interests of domestic industries and consumers,” said a foreign ministry spokesperson.

“Recently we’ve seen many reports in which Australia dresses up as a victim, pointing an accusing finger at China, directly or by insinuation. This move is meant to confound the public and we will never accept it.”

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