Australia Remains Hopeful More Tariffs on Exports to China Will be Lifted

Workers load containers on a cargo ship at Port Botany in Sydney, Australia, on Dec. 2, 2020. Saeed Khan/AFP via Getty Images

Australia is optimistic that the Chinese communist regime will withdraw punitive tariffs on more Australian commodities following a recent lift on the barley trade sanction.

On Aug. 4, the Chinese Communist Party (CCP) made a surprise move by removing the 80.5 percent tariff imposed on Australian barley since 2020, citing changes to its “market situation.”

China is Australia’s largest export market for barley, with a value of nearly $1 billion (US$660 million).

The tariff was among Beijing’s heavy trade restrictions placed on $20 billion worth of Australian export commodities after tension escalated between the two countries due to several political matters, including Australia’s call for an inquiry into the origins of COVID-19 virus.

Before removing the barley trade impediment, the CCP had loosened restrictions on some Australian products, such as coal and timber, amid an improvement in the relationship between the two countries.

In an interview with Sky News Australia, Agriculture Minister Murray Watt said Australia saw Beijing’s latest move as “a template” for how the trade restrictions on other products should be resolved.

“We obviously brought action in the World Trade Organization to resolve the dispute. But we’ve always said that we would much prefer to resolve these sorts of trade disputes through dialogue that’s managed to occur with barley,” he said.

“We‘d certainly like to see that happen with wine. And there are some other products, in particular things like beef establishments and beef processing establishments that remain to have trade impediments. And we’d like to see them resolved as quickly as possible.”

The minister also noted that Australia did not give any concessions to have the barley tariff removed.

“We’ve just been very consistent in our position, arguing that we think that we should be following a rules-based trading system, that we thought that these tariffs were unfair,” he said.

“And what we’ve also argued is that this is in the interest of both countries.

“In the end, the decision from China was made on the basis that their barley importers, in particular their brewing companies, needed to have access and wanted to have access to Australian barley.”

Lessons Learned Through the Trade Dispute with China

As Mr. Watt elaborated on how the Australian government managed to convince the Chinese communist regime to drop the tariff, he said Australian producers had learned that they needed to have more diversified markets.

He also noted that the federal government had put efforts into opening new markets for Australian products.

“Over the last 12 months, the Department of Agriculture has opened up new markets in about 100 cases around the world, whether that be for stone fruit or other sorts of products, beef, sheep meat,” Mr. Watt said.

“So we do need to make sure that we have those broader market options going forward as well.”

This photo shows a paddock of barley being harvested on a farm near Inverleigh, Australia on Dec. 14, 2020. William West/AFP via Getty Images

While the trade sanctions imposed by the CCP caused significant damage to many Australian producers, they barely affected the Australian economy.

According to a report by the Productivity Commission, Australia’s real GDP decreased by a mere 0.009 percent as a result of the trade dispute with Beijing, while the output from the primary production sector dipped by 1.4 percent.

In addition, some economists found that most of the affected industries were able to thrive in new markets and suggested that the trade war hurt the Chinese economy more than Australia.

PM Rejects Speculations on His Trip to China

While Prime Minister Anthony Albanese welcomed Beijing’s “positive” decision, he said his next visit to China would not be “a transactional exercise” in return for the lift of tariffs on barley.

“I would like to take up the opportunity to visit China [and] I’ve said the whole way along, even before some of these impediments were removed, dialogue is always a good thing,” he told ABC Insiders.

“I want to cooperate with China where I can, [and] to disagree where we must.

“It is in Australia’s interests to engage with China, and it is in China’s interest to engage with Australia.”

The prime minister also confirmed that he would raise the case of detained Australians, including journalist Cheng Lei, during his visit to China.