San Francisco Frontiers - China to remove tariffs on Australian barley as ties improve

Beijing imposed hefty levies on key Australian exports such as barley, beef and wine in 2020, leveraging its economic muscle at the height of a bitter dispute with the then-conservative government.

It also stopped imports of some of Australia's most significant commodities, including coal, which curbed billions of dollars in trade.

But on Friday, China's commerce ministry said it was "no longer necessary to continue to impose anti-dumping duties and countervailing duties on imports of barley originating in Australia in view of changes in the Chinese barley market".

In turn, Australia said it would drop a retaliatory case against the world's second-biggest economy at the World Trade Organisation, which was paused earlier this year as the countries' trade ministers stepped up negotiations.

"We welcome this outcome, which paves the way for our barley exporters to re-enter the Chinese market -- benefiting Australian producers and Chinese consumers," Foreign Minister Penny Wong said in a statement.

China had been angered by Canberra's legislation against overseas influence operations, its barring Huawei from 5G contracts and its call for an independent investigation into the origins of the Covid-19 pandemic.

But their icy relations appear to have thawed since Australia's centre-left government adopted a less confrontational approach to China following its election a year ago.

Recent economic data released by Beijing suggests the country's post-Covid recovery is running out of steam and growth is slowing, and calls for government support measures are ramping up.

The softening of tensions with Canberra comes as Chinese President Xi Jinping has taken a more pragmatic approach to relations with its international partners, including a pick-up in talks with the United States.

Xi had called for relations with Australia to "improve" in a November 2022 meeting with Prime Minister Anthony Albanese.

It was the first formal summit between the two countries in more than five years.

Australia has this year resumed exports of coal and timber, which were among a slew of commodities hit by Chinese import bans and restrictions as diplomatic relations soured in recent years.

And trade minister Don Farrell told reporters in June that barley was "the next cab off of the rank" following a "good meeting" with his Chinese counterpart, Wang Wentao, in Detroit.

Barley exports to China were worth about Aus$916 million (US$600 million) in the 2018-19 season.

Farrell said he is also keen to get quality Australian wine back into China by removing anti-dumping measures imposed since November 2020, adding that he had seen growers "leaving grapes to wilt on the vine rather than suffer the uncertainty of the global market".

V.Mitchell--SFF