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Summary
- Australia made a formal announcement of taking China to the WTO regarding 80 per cent barley tariffs.
- Trade Minister Simon Birmingham warned the process might be extended, but there were specific things that could have been done to make it faster.
The Australian government announced that it would take China to the World Trade Organisation over massive tariffs on Australian barley.
The situation which arose in May has posed a significant threat to the A$2.5-billion sector.
This is the first formal complaint which Australia has made against China regarding the agricultural goods. Trade Minister Simon Birmingham welcomed the decision, saying it was the correct thing to do.
Before acknowledging the next move, the Federal Government collected all evidences, and data received from the extensive analysis. Mr Birmingham believes those factors will make a strong case for Australia and hopes to bring the barley industry back to its feet.
Barley is one of the worst-affected agricultural commodities due to Chinese authorities’ decision of raising the tariffs to a whopping 80 per cent in May.
The strict rules will be in place for the next five years, bringing uncertainty to the barley commodity businesses and their employees.
Image Source: Shutterstock
What was the reason for the imposed tariffs?
The reason for the raised tariffs on barley was similar to the increased wine tariffs whose aim was to throw competitors out of competition from the Chinese market.
Australia was accused of selling exported goods for a discounted price, so Chinese businesses would not stand a chance. However, the Australian government has denied those allegations.
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What could be expected from the legal process?
Mr Birmingham said the legal dispute with the WTO could take years to be resolved, but there could be a solution to the earlier resolution.
Previous public feuds analysed by the WTO showed that countries could, at any time, put a stop to allegations and, instead, communicate through their representatives.
The Trade Minister hopes the WTO will be transparent in its process to deal with the situation, as well as presenting the correct view of what is China doing to address the trade problems. He also added that the industry needs the feeling of reassurance for the future events.
Australia has taken Canada and India to the WTO regarding wine and sugar traiffs in recent years.
Australia decided to take China to the WTA after wine, seafood, coal, and other commodities suffered harsh tariffs and bans overseas.
DID YOU READ: China turns up the heat on trade war, bans Australian coal
Image Source: Shutterstock
What is the barley industry saying?
Barley exporters are backing the Federal Government’s decision as they believe they have been wrongly accused of expressing monopoly behaviour.
At first, some people in the business sector were not entirely sure about the legal action. They were afraid that the process would be long and bring even more uncertainty to the commodity export business.
If the tariffs continue to be active for the next five years, barley exporters are expecting to lose A$2.5 billion.
