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  • Writer's pictureDavid James Connolly

China agrees to lift tariffs on Australian barley

Tokyo | China has agreed to lift tariffs on imports of Australian barley from Saturday in a key concession to more than $20 billion worth of sanctions on exports imposed at the height of political tensions between Canberra and Beijing.


China’s Commerce Ministry said in a statement on Friday it had advised the government’s Customs Tariff Commission to remove anti-dumping and countervailing duties on barley imports from August 5.


Barley, exports of which had been worth $600 million a year, was the first commodity hit by China’s campaign of economic coercion. Bloomberg


“The Ministry of Commerce has ruled that it is no longer necessary to continue to impose anti-dumping duties and countervailing duties on imports of barley originating in Australia in view of changes in the Chinese barley market,” it said in a statement.


It also said anti-dumping and countervailing duties would be cancelled from August 5.


The decision is a big backdown by Beijing over its campaign of economic coercion against Australia and paves the way for the potential removal of restrictions on other products.


China’s backdown has been welcomed by the Albanese government, with Foreign Minister Penny Wong and Trade Minister Don Farrell expected to comment later this afternoon in Adelaide.


Big business also welcomed the move as a positive step for Australian agriculture. Australian Grape & Wine chief executive Lee McLean said process used to lift the barley tariffs – a suspension of Australia’s WTO challenge while China conducted a review – may also serve as a template for China to axe its tariffs on Australian wine.


“While there has been no change in the situation for Australian wine exports at this point, we hope this announcement may provide a template for removing import duties on Australian wine in due course,” Mr McLean said.


“We are very pleased to see the bilateral relationship is continuing to improve in such a tangible way, following on from the steady increase in political engagement we’ve seen in recent months.“


The decision helps ease the way for Prime Minister Anthony Albanese to visit Beijing later this year, although further easing of trade sanctions may be required. The government has tied Mr Albanese’s visit to China’s willingness to lift the trade sanctions against Australian exports to China.


As well as wine, lobsters is the highest profile commodity that remains in limbo.


The announcement came a week ahead of a deadline for China to announce the outcome of the review of the tariffs after the Albanese government agreed to suspend its World Trade Organisation challenge.


The Australian Financial Review understands the WTO’s draft ruling, which has been handed to both governments, found in favour of Australia.


China imposed an 80.5 per cent tariff on Australian barley in May 2020, claiming it was being dumped and undercutting local producers, just weeks after the Morrison government angered Beijing with its call for an investigation into the origins of the coronavirus pandemic.


Barley, exports of which had been worth $600 million a year, was the first commodity hit by China’s campaign of economic coercion.


China has this year eased restrictions imposed at the time on coal and timber but trade flows in other key products are struggling to return to pre-pandemic levels.


While China had been expected to back down on the barley tariffs, the decision to remove them was not certain until Friday.


Earlier, the Global Times newspaper warned the Albanese government against putting a deadline on the decision.


“Australia should put more trust in China to proceed with the barley investigation in an orderly manner, instead of demanding a deadline at this stage,” Chen Hong, president of the Chinese Association of Australian Studies and director of the Australian Studies Centre at East China Normal University, told the newspaper.
















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