 suspends anti-dumping and countervailing duties on Australian barley imports, signaling thawing Sino-Australian relations. The decision is expected to facilitate bilateral trade and economic exchanges, meet growing domestic barley demand, and benefit both industry players and consumers.){kind=link}
The People’s Republic of China’s Ministry of Commerce (MOFCOM) announced last Friday that it will cease its anti-dumping and anti-subsidy duties on Australian barley imports effective Saturday. This move comes in response to shifts in China’s barley market, making these levies obsolete.
Historically, MOFCOM had imposed hefty tariffs on imported barley from Australia, including a 73.6 percent anti-dumping duty and a 6.9 percent countervailing duty. These tariffs, which were established in May 2020, were slated to span a five-year period, as detailed in MOFCOM’s official declaration.
This decision to reassess the tariffs’ necessity originated from an appeal made by the China Alcoholic Drinks Associations in April. Subsequent deliberations by MOFCOM resulted in a determination that the continued application of these duties on Australian barley imports had become superfluous, given the evolving circumstances of the Chinese barley market.
Industry experts have predicted that this development will contribute to the improvement of Sino-Australian relations, particularly in light of recent easing tensions. The decision is expected to fortify and expand bilateral trade and economic exchanges, as well as sustain momentum across various sectors.
Professor Song Wei from the Beijing Foreign Studies University’s School of International Relations and Diplomacy explained to the Global Times that this cessation of duties could realign China-Australia relations and accelerate their sustainable growth. Despite the past economic frictions, China remains Australia’s biggest trading partner.
Song emphasized China’s role in promoting regional cooperation and the vital role it has played in supporting Australian exports, which predominantly include agricultural goods and minerals.
Chinese Ambassador to Australia, Xiao Qian, in an exclusive interview with the Global Times, mentioned a crucial window period in the China-Australia economic and trade relations. He observed that since the imposition of the duties, China’s demand for barley has steadily grown due to its critical role in beer production and animal feed manufacturing.
Domestic barley supplies have proven insufficient in meeting this burgeoning demand. Meanwhile, imported barley has maintained its role as a significant source for local merchants. Global uncertainties have further strained the international barley supply, thereby reinforcing the need for foreign barley imports.
Terminating these tariffs is expected to yield positive results for both industry players and consumers. An official MOFCOM statement highlighted that the reduction in barley procurement channels and increased risks for ensuring a steady and diverse domestic barley supply had imposed additional operational costs on downstream businesses.
Despite the imposition of tariffs, Australia continued to be China’s largest source of barley in 2019. In 2020, China procured 1.49 million tons of barley from Australia, which accounted for 18.46 percent of its total barley imports that year. After the tariffs were imposed, China’s barley imports from Australia began to decline.
The conclusion of the barley tariffs will also supply more top-tier beer to Chinese manufacturers and consumers due to the escalating market demand. Chen Hong, President of the Chinese Association of Australian Studies and Director of the Australian Studies Centre at East China Normal University, also observed that Australia still relies on China’s ever-expanding market for the promising future of other sectors.
Despite past trade frictions, economic ties between the two nations have steadily improved, with much potential yet to be realized. Earlier this year, the Global Times reported increased sales of Australian cotton to China, resumption of Australian coal imports by Chinese steel companies, and signs of trade recovery in Australian timber and lobster industries.
Chen further noted that China conducted the review and decision-making process at its own pace. He advised Australia to trust China’s judgment instead of insisting on specific demands. He stated that the modifications in tariff policy were a reflection of current market conditions and were based on factual evidence.
Australian Trade Minister Don Farrell welcomed the move, describing it as a “positive step in the full resumption of normal trade.” Australian Foreign Minister Penny Wong also applauded the decision, stating it was the right outcome for both Chinese consumers and Australian producers.
Farrell hinted at the potential for good news from China regarding the review of punitive tariffs on Australian barley exports. Amid thawing relations, he expressed hope for a positive outcome, emphasizing the “goodwill” between China and Australia.
Despite the apparent progress, there were warnings that Australia should refrain from becoming entangled in the procedural details of the review period. Li Yong, a Senior Research Fellow at the China Association of International Trade, clarified that the duration of the review period was determined by legal protocols, not human intervention.
Experts also encouraged Australia to maintain the positive momentum through tangible practices and strategic determination, rather than adopting a partisan stance aligned with the United States. Song noted that Australia’s recent public political gestures, which appeared to side with the United States, could be detrimental to the ongoing development of Sino-Australian relations. She urged Australia to adopt pragmatic measures to advance bilateral ties.
Echoing Song’s sentiment, Chen urged the Australian government to address discordant voices domestically with political wisdom and strategic determination. He pointed out the recent trade figures: in the first half of 2023, trade between China and Australia reached $116.16 billion, a year-on-year increase of 8.6 percent, indicating the potential for further growth.
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