The Albanese government will press China to remove tariffs on Australian wine, after Beijing’s backdown on barley gave other exporters hope of a further easing of trade tensions.
China’s commerce ministry said it would scrap 80.5% tariffs on Australian barley, a measure that had wiped out trade worth nearly $1bn a year.
The measure was imposed at the height of the diplomatic dispute with the then Morrison government in 2020, sparking claims of “economic coercion”, although Beijing always argued it was justified on technical grounds.
The breakthrough will be seen as increasing the chances that the prime minister, Anthony Albanese, travels to Beijing before the end of 2023, even as his government vows to continue to seek the release of Australians detained in China.
In a notice published on Friday, China’s commerce ministry announced that “in view of the changes in the market situation of barley in China” it was “no longer necessary to continue to impose anti-dumping duties and countervailing duties on the imported barley originating in Australia”.
The Australian government confirmed that it would now discontinue its World Trade Organization challenge against the barley tariffs – a process it had already suspended when Beijing said it would review the measure.
As it stands, however, the government has maintained its active WTO challenge against China’s tariffs of up to 212% on Australian wine.
The trade minister, Don Farrell, said on Friday: “We intend to use this process as a template for resolving the issue in respect of wine, which is still ongoing.
“I’ve consistently said, including in my warm meetings with the Chinese commerce minister, Wang Wentao, that we would prefer to resolve all of our disputes with China through discussion and dialogue, rather than disputation.”
Australia’s foreign affairs minister, Penny Wong, praised Farrell for steering “the management of this dispute so adroitly, with great success for our nation and particularly for barley producers”.
Wong said the barley decision was “the right outcome for Australian producers and the right outcome for Chinese consumers”.
“It affirms the calm and consistent approach that the Albanese government has taken since we have come to office on these issues,” she said.
In April, the Australian government agreed to suspend the WTO challenge against the barley tariffs in return for China agreeing to commit to review the barley tariffs within three to four months.
The WTO ruling had been imminent when the challenge was frozen. The Australian government had always said it would resume the challenge if China’s review did not end with a decision to scrap the tariffs, confident that the WTO panel would decide the measures were not justified.
Wong hinted that she believed the pressure of an imminent WTO ruling may have helped Australia secure the decision.
“We would not have been able to get this outcome without working through the WTO, which of course is an important part of the rules-based order, the multilateral order that Australia has such a great interest in,” she said on Friday.
Wong said Australia was “confident of our case” at the WTO on wine. She reiterated that it would be in the interests of both countries for all remaining trade impediments to be removed, including wine, lobster and red meat.
Asked whether the decision paved the way for Albanese to visit China before the end of the year, Wong said it was “a positive development”.
“The prime minister has made clear he would welcome a visit and we hope we can continue on the positive path we are on,” she said.
In recent weeks, Wong has urged Beijing to foster “positive circumstances, a positive atmosphere” to enable such a visit – a message likely interpreted as a push for further progress on resolving the trade disputes.
Wong said the prime minister, ministers and officials would also continue to advocate for the detained Australian journalist Cheng Lei and writer Yang Hengjun “to be reunited with their families”.
The federal opposition urged the government to “continue to be applying every possible lever it can for the release of unfairly detained Australians”. It also welcomed the barley decision.
The Coalition’s foreign affairs spokesperson, Simon Birmingham, and trade spokesperson, Kevin Hogan, said: “Today’s announcement that China will remove what we have always perceived as illegal and punitive tariffs on Australian barley is welcome.”
The chair of Grain Producers Australia, Barry Large, said the removal of the tariffs would “allow Australian producers to re-commence selling and exporting our high-quality barley to China again”.
The National Farmers’ Federation said China had previously accounted for about 60% to 70% of Australian barley exporters.
The NFF chief executive, Tony Mahar, said: “Scrapping these tariffs is welcome news for some 23,000 Australian grain producers who have been impacted by the tariffs imposed in 2020.”
The chair of GrainGrowers, Rhys Turton, said Australian barley growers were “relieved”, although they would continue to seek new markets because “any concentration of exports makes us vulnerable to external market forces”.
Tracy Lefroy, a grower based in Western Australia, expressed “a mix of relief and cautious optimism”.
“I think most farmers have a realistic understanding that future disruptions in trade to China are possible.”
