Opinion: Australia’s barley answer with China exhibits diplomacy does work

THE settlement between Australia and China to resolve a dispute over Chinese language tariffs on Australian barley with out World Commerce Group (WTO) adjudication is proof of a definite enchancment in relations.

It raises confidence Australia can keep a constructive relationship with China at the same time as US-China relations proceed to deteriorate.

China imposed an 80.5% import tariff on Australian barley in Might 2020, on the grounds Australian barley was offered within the Chinese language market at a worth decrease than its worth in Australia (often known as “dumping”) and was subsidised, harming China’s barley growers.

China’s Ministry of Commerce started an anti-dumping and anti-subsidy investigation into barley in November 2018. On the time it was perceived as retaliation for greater than a dozen anti-dumping actions taken by Australia against Chinese imports over a decade.

However the timing of the tariff resolution, simply weeks after Australia known as for a world investigation into the origin of COVID-19, meant it was perceived as a part of a broader marketing campaign of Chinese language financial coercion that included actions in opposition to Australian coal, beef, lobster and wine.

In December 2020, Australia lodged its declare in opposition to the barley tariffs with the WTO. The breakdown within the official relationship on the time made it not possible for the dispute to be resolved through session.

Final week (on April 11) each events requested the WTO droop proceedings. This follows almost a yr of efforts to restore the connection following the election of the Albanese authorities.

The settlement got here in the identical week that Australia hosted China’s deputy foreign minister, Ma Zhaoxu, the highest-level Chinese language official to go to Canberra in additional than six years.

Official visits by China’s International Minister, Qin Gang (who met Australia’s International Minister Penny Wong in March on the sidelines of a G20 assembly in New Delhi) and senior officers from different ministries like agriculture and schooling, are anticipated to comply with.

What the barley settlement means

Digging into the details of the barley deal, China has agreed to conduct an expedited assessment of barley tariffs within the subsequent three or 4 months.

China’s Ministry of Commerce initiated a review
on April 14, primarily based on an utility lodged by the China Alcoholic Drinks Affiliation. The assessment is required for the ministry to discover a cheap floor to take away the duties. The usual timeframe for such a assessment is 12 months.

For Australia, this gives a faster path to get barley again within the Chinese language market than continuing with the WTO case.

Whereas a choice from the WTO panel listening to the dispute was anticipated in simply days, a discovering that Australia wasn’t dumping barley on China might have meant one other yr earlier than the tariffs had been terminated. It’s because China would retain the choice of interesting the choice. Even when it then misplaced the enchantment, it might nonetheless have dragged out eradicating the tariffs.

The method units a helpful template for a way Australia may equally get China to take away the tariffs (of 116% to 218%) imposed on Australian wine in March 2021.

Australia initiated WTO continuing in June 2021, with the WTO panel established 4 months later. It’s anticipated to subject its resolution by mid-2023. However persevering with with the method may also take for much longer for the tariffs to be eliminated.

This method may doubtlessly be a template for the events to droop WTO dispute proceedings introduced by China against Australia for its anti-dumping and anti-subsidy tariffs on chosen Chinese language imports.

Knocking on the Trans-Pacific Partnership’s door

For China, a extra strategic purpose behind the settlement could be assuaging Australia’s resistance to China becoming a member of the Complete and Progressive Settlement for Trans-Pacific Partnership (CPTPP).

The commerce pact includes 11 Pacific-rim nations and now Britain, whose request to hitch was accredited by the opposite signatories in March.

China lodged its utility to hitch after the UK, in September 2021. It too wants consensus approval from all CPTPP events, and Australia has made its place crystal clear: China should finish its commerce sanctions and present a functionality and willingness to reside as much as the CPTPP’s excessive requirements.

Resolving the barley dispute is a place to begin. It can additionally reveal {that a} rules-based international buying and selling system can affect China’s behaviour. That’s not surprising, as a result of no nation has a bigger stake in international commerce. Final yr China’s items commerce reached $US6.3 trillion, almost $US900 billion greater than the US.

For Australia, starting a dialogue about China becoming a member of the CPTPP might pace up regaining market entry for its exports, and be a possibility to safe China’s dedication to a rules-based settlement that exceeds WTO minimums.

From cautious optimism to cheap confidence

The anticipated decision of the barley dispute will not be an remoted achievement. It demonstrates the effectiveness of the Albanese authorities’s diplomatic method to China.

This has concerned incrementally rebuilding financial cooperation whereas managing disagreements on values and safety points by way of calm {and professional} engagement. Amid geopolitical tensions with the US, China can also be trying to stabilise its exterior atmosphere.

Financial cooperation stays a standout space of frequent curiosity. Add in political willingness and diplomatic knowledge, and an evaluation of cautious optimism will be changed by considered one of cheap confidence within the upward trajectory of the bilateral relationship.

Weihuan Zhou, Affiliate Professor, Co-Director of China Worldwide Enterprise and Financial Legislation (CIBEL) Centre, School of Legislation and Justice, UNSW Sydney, UNSW Sydney and James Laurenceson, Director and Professor, Australia-China Relations Institute (ACRI), University of Technology Sydney

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