In ‘sign of goodwill’, federal government temporarily suspends WTO challenge as China agrees to review its tariffs

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• The federal government has agreed to temporarily suspend its challenge against China’s tariffs on Australian barley through the World Trade Organization dispute process. Photograph: William West/AFP/Getty ImagesAustralian foreign policy

  Australia strikes deal with China over barley trade dispute

  In ‘sign of goodwill’, federal government temporarily suspends WTO challenge as China agrees to review its tariffsFollow our Australia news live blog for the latest updatesGet our morning and afternoon news emails, free app or daily news podcast

  
  

  Daniel Hurst Foreign affairs and defence correspondentTue 11 Apr 2023 07.12 BST

  The Australian government has reached a deal with China that may lead to the removal of tariffs on Australian barley that were introduced at the height of diplomatic tensions in 2020.While the axing of the tariffs is not guaranteed, the Australian government presented the snap review as an important “pathway” to resolve one of the most complex trade disputes between the two countries.The foreign affairs minister, Penny Wong, and the trade minister, Don Farrell, announced that China had “agreed to undertake an expedited review” of its tariffs on Australian barley over the next three to four months.

  In return, Australia had agreed to temporarily suspend its challenge against the tariffs through the World Trade Organization dispute process.

  China imposed punitive tariffs of more than 80% on Australian barley in 2020, arguing the move was needed to level the playing field because the sector gained subsidies and Australian barley was being “dumped” cheaply on the Chinese market.

  Australia always rejected those claims and the previous Morrison government initiated a WTO challenge. The announcement on Tuesday appeared to be aimed at giving China an off-ramp to drop the tariffs without the risk of a formal ruling against the measures.

  Wong, who is acting as prime minister while Anthony Albanese is on leave, said the government would resume the WTO dispute process if China did not remove the barley tariffs at the end of the review period. The review is expected to take three months but may extend to a fourth month if required.

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  • Farrell said the move was “a sign of goodwill” and reflected Australia’s desire to pursue discussions to “resolve our outstanding issues with China”.“We hope that this will be template for then moving on to the other areas of dispute, in particular in respect of Australian wine, which is also subject to very high tariffs,” Farrell said. 
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