Australia calls on China to lift all trade restrictions following the removal of barley tariffs

Australia is calling on China to remove all remaining trade restrictions following Beijing’s decision to lift tariffs on Australian barley imports. This move indicates a potential normalization of bilateral relations.

Canberra is now anticipating the removal of tariffs on Australian wine imports, which were introduced in March 2021. During the peak of diplomatic tensions in 2020 and 2021, Beijing imposed import tariffs on various Australian exports, including wine, red meat, lobsters, and timber.

“We are calling for the removal of all barriers that currently affect our trading relationship with China,” stated Trade Minister Don Farrell in an interview with CNBC on Monday.

Farrell also mentioned that the approach taken with the barley application served as a template for resolving the wine issue. He sees an opportunity for further talks with the Chinese government.

According to Farrell, a decision on wine tariffs is expected in the near future, and he is confident that the 220% tariffs imposed on Australian wine will be lifted.

In April, Australia agreed to temporarily suspend its World Trade Organization complaint against China regarding the 80.5% duties imposed on Australian barley trade. This paved the way for China to expedite its review of the tariff decision.

Last Friday, the Chinese Commerce Ministry announced the removal of all anti-dumping and countervailing duties on Australian barley after more than three years since their imposition. The ministry cited “changes in the Chinese market” as the reason but did not provide further explanation.

Farrell stated that various factors contributed to this decision, with Chinese beer consumers and barley importers strongly in favor of reintroducing Australian barley.

This development signifies an improvement in relations between Australia and China, following the initial meeting between President Xi Jinping and Prime Minister Anthony Albanese at the Group of 20 leaders’ summit in Bali in November.

Australia’s foreign minister Penny Wong and trade minister Farrell have since made multiple visits to Beijing and engaged in direct meetings with their Chinese counterparts.

Relations between the two countries deteriorated in 2020 when Australia supported the call for an international inquiry into China’s handling of the COVID-19 pandemic. However, Australia’s approach throughout the process has been focused on de-escalation and resolving issues through dialogue rather than confrontation.

Prior to the pandemic, Australia was one of the few developed nations with a trade surplus with China. In response to China’s trade restrictions, Australia has sought to diversify its trading relationships, including through free trade agreements with India and the United Kingdom. Farrell expressed hope for a trade deal with the European Union in the near future.