Australia’s barley industry responds to China’s tariff measures
The Australian barley industry has expressed its deep disappointment with the announcement by the People’s Republic of China to place punitive tariffs on Australian barley exports to China. This follows an anti-dumping and countervailing subsidy investigations initiated by China in November 2018.
The People’s Republic of China has imposed a dumping margin of up to 73.6% and a subsidy margin of up to 6.9% for all barley imported from Australia on all barley imported from Australia, effective from 19th May 2020, in response to its investigations.
These tariffs will disrupt and ,most likely halt exports by artificially increasing the price of Australian barley imported to China until the situation is resolved. It is estimated this dispute could cost Australian grain industry and notably rural and regional economies at least $A500 million perannum.
For a number of years China has been Australia’s largest barley export market and Australia is the largest supplier of barley to China. This imposed duty makes Australian barley less competitive into the Chinese market and has placed significant downward pressure on barley values offered to Australian growers.
China initiated anti-dumping and countervailing subsidy investigations regarding Australian barley exports in November and December 2018. The World Trade Organisation (WTO) definition of dumping is when exports are sold at a price lower than the exporting country’s domestic market, and/or lower than production costs which results in ‘injury’ to the importing country’s domestic production.
Australian exporters, industry bodies and government provided extensive submissions to China’s Ministry of Commerce (MOFCOM) as part of the investigations. These submissions included information regarding every aspect of Australia’s barley industry, covering farm to consumer, data around export and domestic sales programs, company ownership and operational structures.
The organisations making this statement and their members; the Grains Industry Market Access Forum, Australian Grain Exporters Council, GrainGrowers, Grain Producers Australia and Grain Trade Australia fully respect China’s right to conduct these investigations and have cooperated fully.
However, we do not believe the outcomes announced by China has have been adequately substantiated. We are confident that the information provided by Australian grain industry and Government evidenced that:
- The claim of dumping, causing injury to China’s domestic barley industry was unsubstantiated;
- The Australian grain industry operates in an open, commercial and competitive global market;
- The notion of dumping is not consistent with the commercial realities of the Australian grain industry, where export sales are made at values above the purchase price offered to growers, which is in turn above their cost of production; and
- Australian farmers do not receive countervailing subsidies as claimed.
Consequently, we are deeply disappointed that China has chosen to apply tariffs against the Australian barley industry. The duties will disrupt the Australian barley market, cause ongoing market uncertainty and have a significant impact on participants in the Australian barley industry, including growers and grain exporters. We are also concerned the disruption will have an adverse impact on Chinese customers and industries that rely on Australian supply.
We call on the Australian Government to support Australia’s farmers and exporters by engaging deeply with China in a respectful and meaningful way to resolve the issue and to concurrently and immediately pursue the WTO Dispute Settlement process to the fullest extent possible.
The Australian barley industry’s relationship with China began in the 1960s. We very much hope a timely and amicable resolution can be agreed including the removal of duties to enable trade to be reestablished, for the benefit of industries in both countries.
