Sydney: Australia said on Wednesday that it will ask the World Trade Organization (WTO) to investigate China’s tariffs on barley imports. Daily tensions have intensified after reports that Canberra banned coal exports for violating WTO rules.
This move will mark the first time Australia has filed a complaint with the organization, but Trade Minister Simon Birmingham warned that as relations between trading partners continue to deteriorate, other departments may take further action.
He said that Beijing’s 80% surcharge on barley exports from Australia was “unsubstantiated” and “not supported by facts and evidence”.
“We are highly confident that based on the evidence, data and analysis that we have put together already, Australia has an incredibly strong case,” Birmingham added.
China argues that the grain is produced with government subsidies and sold below cost, so is subject to anti-dumping duties.
Australia’s barley exports to China had been worth around US$1 billion a year before a recent drought, and are used most notably in beer-making.
GrainGrowers, an Australian industrial group, welcomed the decision and said that Chinese tariffs could cost the industry about $1.9 billion in the next five years.
Experts say that Beijing has been considering restrictions on Australian barley imports since 2018 due to concerns that China (whose output accounts for only about 20% of crop demand) is overly dependent on imports.
Since the Tiananmen Square crackdown in 1989, Sino-Australian relations have been at their lowest ebb, and Beijing has imposed a series of economic sanctions on Australian products.
Each dispute is called a technical issue, but many in Canberra believe that the sanctions are retribution to Australia, which opposes China’s influence at home and in the Asia-Pacific region, and calls for investigation of its origin earlier this year. Coronavirus.
At least 13 Australian industries have suffered tariffs or some form of damage, including beef, coal, copper, cotton, lobster, sugar, timber, tourism, universities, wine, wheat and wool.
On Tuesday, Prime Minister Scott Morrison said that Beijing has not confirmed official media reports that Australia’s multi-billion-dollar coal exports are now subject to an informal ban.
The Global Times said on Sunday that power plants are being directed to buy coal domestically and from countries outside Australia.
“If that were the case, then that would obviously be in breach of WTO rules,” Morrison said. “It would be obviously in breach of our own free-trade agreement and so we would hope that is certainly not the case.”
The tensions have called into question Australia’s highly successful economic model — based on supplying the raw materials for China’s breakneck emergence as a modern economy.
China’s foreign ministry on Tuesday said that any trade measures taken against Australia were “in line with China’s laws and regulations and international practices. They are also responsible steps to safeguard the interests of domestic industries and consumers”.
“Recently we’ve seen many reports in which Australia dresses up as a victim, pointing an accusing finger at China, directly or by insinuation. This move is meant to confound the public and we will never accept it.”
Until now, Australia has avoided bringing the dispute to the Geneva-based organization, worrying that a resolution may take years, allowing Australia to accept retaliatory demands and further worsening the relationship.
But Birmingham said: “China has taken a series of different actions during the year, and each action puts forward a slightly different standard for your response in the WTO.”