China and Australia end 'barley war' after 3 years

China’s Ministry of Commerce announced on August 4 that it will lift anti-dumping and anti-subsidy tariffs on barley imported from Australia, effective from August 5, amid changes in China’s barley market, Reuters reported.

Following the announcement from China, Australian Foreign Minister Penny Wong said Canberra would drop its WTO case against Beijing over the tariff policy.

"We welcome this outcome. This will pave the way for our barley exporters to re-enter the Chinese market, benefiting Australian producers as well as Chinese consumers," AFP quoted Ms. Wong as saying in a statement on August 4.

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While tariffs on Australian barley will be lifted, other Australian products will remain subject to Chinese restrictions, including wine, which is also subject to high tariffs. Exports of lobster and meat from some Australian abattoirs to China have also been hampered.

“The outcome on barley demonstrates the importance of the WTO dispute settlement mechanism in protecting the interests of Australia’s world-class producers and farmers. We have made it clear that we expect a similar process to be followed to remove tariffs on Australian wine,” the three Australian ministers said in a joint statement.

Relations between Australia and China deteriorated in 2020 after Canberra called for an investigation into the origins of the Covid-19 pandemic, leading Beijing to impose tariffs on major Australian exports such as barley, beef and wine that same year. Australia responded by launching a WTO case against China, although the case was suspended this year as trade ministers from both countries pressed ahead with talks.

Tensions between Canberra and Beijing have eased since the centre-left Labor Party took power in Australia last year. In January, China resumed buying Australian coal, and in May, Beijing also announced it would resume importing Australian timber.