Australia and China Reach Agreement to Resolve Their Dispute Over Barley Trade.

The Australian government has revealed a possible breakthrough in the country’s tense trading ties with China. The two countries have achieved a deal that might result in the lifting of tariffs imposed by China on Australian barley in 2020.

The barley trade dispute has been one of the most difficult issues between the two countries, and this agreement is being welcomed as a significant step towards resolving it.

The Australian government portrayed the hasty review as a critical “pathway” to resolving the dispute. As part of the accord, China has promised to conduct an expedited review of its tariffs on Australian barley over the next three to four monthsd to conduct an expedited review of its tariffs on Australian barley over the next three to four months.

In exchange, Australia has agreed to temporarily delay its tariff challenge through the World Trade Organisation dispute resolution process.

China placed more than 80% tariffs on Australian barley in 2020, claiming industry subsidies and suspected “dumping” of cheap Australian barley on the Chinese market.

Australia rejected these claims and filed a WTO complaint. This move appears to be intended to allow China an exit without the danger of a formal decision against the tariffs.

The evaluation is planned to take three months, although it may be extended to a fourth month if necessary. If China does not eliminate the barley tariffs by the conclusion of the review period, the Australian government will reopen the WTO dispute process.

However, the action is being interpreted as a sign of goodwill and Australia’s wish to resume conversations to “resolve our outstanding issues with China.”

Because China had previously been Australia’s major export market for barley, the tariffs caused enormous damage to the industry. Between 2014–15 and 2018–19, the value of Australian barley exports to China averaged around $1.2 billion per year.

The announcement comes as part of continuous efforts to “stabilise” the relationship between Australia and China, which reached a low point in 2020 amid significant economic and political disagreements.

CONCLUSION:

The agreement between Australia and China on the review of barley tariffs is a key step towards settling one of the two countries’ most complex trade issues. While the tariffs are not assured to be eliminated, the Australian government described the study as a key “pathway” to resolving the dispute.

If this arrangement is effective, it could result in the elimination of all tariffs on Australian barley, which would benefit Australian growers.

The reopening of trade discussions between officials from China’s and Australia’s foreign ministries is also an optimistic indicator for a speedy and complete resumption of trade.