Barley silos at a grain facility in Balliang, Victoria, Australia.
Photographer: Carla Gottgens / Bloomberg
Photographer: Carla Gottgens / Bloomberg
Australia will challenge China before the World Trade Organization over Beijing’s decision to impose heavy tariffs on its barley exports, another sign of deteriorating relations between the two key trading partners.
Commerce Minister Simon Birmingham said on Wednesday that the government had informed Beijing counterparts of its intention “to request formal consultations with China”. The controversy process may take years to resolve, but the organization should recognize that the fees “are not based on facts and evidence,” he said.
“We will make this formal request to the WTO tonight,” Birmingham told reporters. “The WTO’s conflict resolution processes are not perfect and take longer than would be ideal, but ultimately it is the right path for Australia.”
China hit the Australian barley rates above 80% in May after accusing the country of dumping the grain and subsidizing its producers. The rights could cost Australian producers about A $ 2.5 billion ($ 1.9 billion) over the next five years, according to estimates by GrainGrowers, an industry group.
Photographer: Sam Mooy / Getty Images AsiaPac
“We are very confident that, based on the evidence, data and analysis we have already gathered, Australia has an incredibly strong case to mount,” Birmingham said.
A spokesman for China’s Foreign Ministry declined to comment specifically on the case, and told reporters at a briefing in Beijing to contact the relevant department. A representative of the Ministry of Commerce did not respond to a previous request for comment.
Long process
WTO dispute resolution can often be an extractive process and the results are not expected to be known for at least months. A the recent case involving China and the United States lasted about two years, when a group ruled in September that the U.S. broke global regulations when it imposed tariffs on Chinese goods in 2018.
China-Australia relations have been close since 2018, when Canberra banned Huawei Technologies Co. build its 5G network for national security reasons, and it worsened this year after the government of Prime Minister Scott Morrison called for an international investigation into the origins of the coronavirus. Beijing accuses Canberra of being a puppet of the United States and interfering in its internal affairs.
It is a marked investment in the once cordial relationship that saw Australia host a state visit by President Xi Jinping in 2014 and sign a free trade agreement a year later.
Commercial edges
So far this year, China has hit Australia with a number of trade restrictions on products such as copper, wine, wood and lobster amid deteriorating diplomatic ties. While some products, such as wine, have been affected by anti-dumping and anti-subsidy duties, others, including locusts and logs, have suffered customs delays or increased pest inspections.
On Wednesday, China reiterated requests for Canberra to act to improve relations.
“The Australian side has taken some discriminatory actions against Chinese companies in violation of international practices,” said Wang Wenbin, a spokesman for the Foreign Ministry. “We hope the Australian side will take China’s concerns seriously and take concrete action to correct these discriminatory actions. “
Wang had listed a day earlier some of the problems China sees, including the ban on Huawei and the government’s shutdown of a dozen investments by Chinese companies in Australia.
Other challenges
Birmingham did not rule out the possibility of posing new WTO challenges against China, saying Beijing’s anti-dumping claims against the Australian wine industry could boost tariffs on China. more than 200% had criteria similar to those developed on barley and that the government has the capacity to respond.
He added that Beijing’s shares have raised the risk profile of doing business with China for companies around the world.
Coal is also being affected. More than 50 ships carrying Australian coal have been left out of China after it was verbally told in ports in October not to unload these shipments. China’s National Development and Reform Commission appeared on Saturday to formalize those limits after approving power plants to import coal without restrictions, except from Australia, according to a Global Times report.
If this turns out to be correct, this ban would also violate WTO rules and the free trade agreement that China and Australia signed in 2015, Morrison told reporters. In a briefing on Wednesday, the NDRC did not address the latest development with Australia, but preferred to point to efforts to curb coal prices over the winter.
– With the assistance of James Mayger
(Updates with Chinese comments in the sixth paragraph and from the 11th paragraph.)