China to lift tariffs on Australian barley after 3 years

The crop is seen in a barley field at a farm near Moree, an inland town in New South Wales, Australia Oct 27, 2020. REUTERS/Jonathan Barrett/File photo

BEIJING  – China’s Ministry of Commerce said on Friday it would drop anti-dumping and anti-subsidy tariffs on Australian barley imports that had been in place for three years affecting billions of dollars of trade, as the two nations repair strained ties.

China and Australia agreed in April to resolve their dispute over barley imports, with Canberra to suspend a case at the World Trade Organization (WTO) over Beijing’s anti-dumping and countervailing duties on barley, while China promised to speed up a review into the tariffs.

Australian Trade Minister Don Farrell said on Wednesday that he was expecting a positive outcome within days.

The tariffs will be dropped starting on Saturday, China’s Ministry of Commerce said, citing a changing situation in China’s barley market without providing further details.

Relations between the two major commodity trade partners had deteriorated in 2020 after Australia called for an inquiry into the origins of COVID-19, triggering reprisals by Beijing including anti-dumping duties on Australian wine and barley.

But tensions have eased since the centre-left Labor party won power in Australia last year.

Chinese purchases of Australian coal resumed in January after almost three years, while Beijing in May also announced it would start importing Australian timber again.

Beijing implemented tariffs totaling 80.5 percent on Australian barley in May 2020, wiping out imports of the grain by the world’s biggest beer market, worth as much as A$2 billion ($1.31 billion) a year.

That prompted a formal complaint by Australia to the WTO in December that year.

Since then, Chinese buyers have turned to Canada, France and Argentina to replace Australian supplies, while Australian sellers shifted exports to feed barley markets in the Middle East.

Those trade flows are likely to shift again after China drops the tariffs, with its barley buyers expected to begin purchases of the new Australian crop harvested in October for arrival by year-end.

($1 = 1.5223 Australian dollars)