Barley silos in a granary in Balliang, Victoria, Australia.
Photographer: Carla Gottgens / Bloomberg
Photographer: Carla Gottgens / Bloomberg
Australia will challenge China to the World Trade Organization over Beijing’s decision to impose hefty tariffs on its barley exports, a new sign of deteriorating relations between the two main trading partners.
Trade Minister Simon Birmingham said on Wednesday that the government had briefed counterparts in Beijing of its intention to “request formal consultations with China.” It may take years for the litigation process to be resolved, but the organization must recognize that the rates “are not backed by facts and evidence,” he said.
“We will make this formal request to the WTO tonight,” Birmingham told reporters. “WTO dispute settlement procedures are not perfect, and they take longer than would be ideal, but in the end this is the right path for Australia.”
China hit Australian barley with rates of more than 80% in May after the country was accused of dumping the grain and subsidizing its growers. According to estimates by industry group GrainGrowers, the rights could cost Australian producers about A $ 2.5 billion ($ 1.9 billion) over the next five years.
Photographer: Sam Mooy / Getty Images AsiaPac
“We are confident that, based on the evidence, data and analysis we have already prepared, Australia has an incredibly strong case to do,” Birmingham said.
A spokesman for China’s Foreign Ministry declined to comment specifically on the matter, telling reporters at a briefing in Beijing on Wednesday to contact the relevant department. A representative from the Department of Commerce did not respond to a previous request for comment.
Long process
WTO dispute settlement is often a lengthy process and the results are not expected to be known for at least months. A The recent case involving China and America lasted for about two years, when a panel in September ruled that the US was violating global regulations by imposing tariffs on Chinese goods in 2018.
Relations between China and Australia have been fraught since 2018, when Canberra Huawei Technologies Co. banned building its 5G network for national security reasons, and deteriorated this year after Prime Minister Scott Morrison’s government called for an international investigation into the origins of the coronavirus. Beijing accuses Canberra of being a US puppet and meddling in internal affairs.
It’s a clear turnaround in the once cordial relationship where Australia received a state visit from President Xi Jinping in 2014 and signed a comprehensive free trade agreement a year later.
Trade Curbs
So far this year, China has hit Australia with a slew of trade restrictions on copper, wine, timber and lobster, among others, amid deteriorating diplomatic ties. While some products, such as wine, have been affected by anti-dumping and anti-subsidy duties, others, including lobsters and logs, have experienced customs delays or increased inspections for pests.
China reiterated on Wednesday that Canberra must take action to improve relations.
“The Australian side has taken a number of discriminatory measures against Chinese companies in violation of international practices,” said Wang Wenbin, a spokesman for the Ministry of Foreign Affairs. “We hope the Australian side will take China’s concerns seriously and take concrete action to correct such discriminatory measures. “
Wang had a day earlier mentioned some of the problems that China sees, including the ban on Huawei and the government’s halting of a dozen investments by Chinese companies in Australia.
Further Challenges
Birmingham did not rule out the possibility of raising further WTO challenges against China, saying that Beijing anti-dumping claims against the Australian wine industry could push up tariffs more than 200% had similar criteria to those for barley, and that the government can respond.
He added that Beijing’s actions have increased the risk profile of doing business with China for companies around the world.
Coal is also affected. More than 50 ships carrying Australian coal have been stranded off China after ports were verbally told in October not to offload such shipments. According to a report by the Global Times, China’s National Commission for Development and Reform appeared to formalize those curbs on Saturday after allowing power plants to import coal without restrictions except from Australia.
If this were proven to be correct, such a ban would also violate WTO rules and the free trade agreement that China and Australia signed in 2015, Morrison told reporters on Tuesday. During a briefing on Wednesday, the NDRC did not discuss the latest development with Australia, but rather pointed to attempts to keep coal prices in check in winter.
– With help from James Mayger
(Updates with sixth paragraph and eleventh paragraph Chinese commentary.)