China to drop tariffs on Australian barley amid diplomatic thaw

China’s commerce ministry tariffs ‘no longer necessary’, while Australia drops trade complaint.

China has announced it will drop tariffs on Australian barley amid a diplomatic thaw after years of tensions.

China’s commerce ministry said on Friday it was “no longer necessary” to levy antidumping duties on imports of Australian barley due to changes in the local market.

Australia said on Friday it would also drop a related complaint against the second-biggest economy at the World Trade Organisation (WTO).

Australian Foreign Minister Penny Wong welcomed the announcement, which she said would benefit both Australian producers and Chinese consumers.

“The removal of duties is the result of work by government and industry to resolve this matter,” Wong said in a statement.

“We acknowledge and thank industry and affected businesses for their support and patience throughout the World Trade Organization (WTO) process.”

The move follows a thaw in Australia-China relations following the election of Anthony Albanese’s centre-left Labor Party to power in May last year.

In April, Wong announced that the government would suspend its WTO complaint after Beijing agreed to review the tariffs.

Beijing imposed hefty tariffs on Australian exports of barley, beef and wine and other key commodities in 2020 amid a bitter dispute that erupted after the previous conservative government called for an international inquiry into the causes of the COVID-19 pandemic.

The tariffs and unofficial ban on Australian coal are estimated to have cost more than 5 billion Australian dollars ($3.28bn) in lost revenue.

China has been Australia’s biggest trading partner for over a decade and a half, accounting for about one-third of trade. In 2020-21, trade between the countries totalled 267 billion Australian dollars ($175bn).

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