Australia and China Reach Resolution on Barley Dispute, Signaling Improved Trade Relations

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The trade tensions between China and Australia over barley imports have finally taken a positive turn with a recent announcement by China’s Ministry of Commerce (MOFCOM).

On April 14, the MOFCOM issued a notice declaring the launch of a review of anti-dumping and countervailing measures against barley imports from Australia. It will be conducted over the next three to four months, as Foreign Affairs Minister Penny Wong and Trade Minister Don Farrell announced. 

“We hope this will be a template for moving on to the other areas of dispute, particularly in respect of Australian wine, which is also subject to very high tariffs,” Farrell said.

Australia Barley Exports to China Hit by China Tariffs

According to briefings given to the previous government, the high tariffs had “effectively eliminated Australian barley as a feasible option for Chinese importers, and exports to China effectively ceased after the tariff’s introduction.”

In May 2018, China imposed anti-dumping and anti-subsidy duties on Australian barley, citing concerns that Australian farmers were receiving government subsidies distorting the market.

This move severely impacted the Australian barley industry, significantly dropping exports to China from 6.5 million tons to 440,000 tons in 2019-2020. As a result, Australian barley farmers experienced a considerable loss of income due to the surplus of barley in the country.

China Wine Association Citing Changes in Barley Market

The China Wine Association requested a review of Anti-dumping and Countervailing Measures on Barley imposed by the MOFCOM on March 20, 2023, citing changes in China’s barley market.

On March 27, the review application was communicated by MOFCOM to concerned parties, including the Australian Embassy in China and the Australian Grains Industry Market Access Forum. They were furnished with a public version of the application and a non-confidential summary of sensitive information.

The resolution of the two nation’s dispute is a relief to the Australian barley exporters who were hit hard by the imposed tariffs.

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