Australia is making good on a promise to take its trade grievances with China to the international body which overseas the rules of global trade.
Amid deteriorating relations, China has placed bans on a host of different Australian imports including beef, wine, timber, lobsters, barley and now coal.
Australia’s Trade Minister Simon Birmingham said on Wednesday the federal government will take a complaint to the World Trade Organisation (WTO) specifically about China’s ban on Australian barley.
Mr Birmingham said Beijing had been made aware of “Australia's intention to request formal consultations with China in relation to the application of anti-dumping and countervailing duties against the Australian barley industry”.
“We will make those formal requests through the WTO tonight,” he told reporters in Canberra.
“This is the logical and appropriate next step for Australia to take.
“This isn't the first time, even in my stead as Australia's trade Minister that we have taken such action,” he added.
China has given Australian ministers the diplomatic cold shoulder and refused to discuss its trade bans in recent months and the move will aim to bring China to the negotiating table with an independent arbiter.
Australian farmers were effectively blocked from exporting barley to China in June when import taxes of 80.5 per cent were imposed.
Dispute could take years to resolve
China claims the tariffs are a result of an anti-dumping investigation, a claim rubbished by the Australian government and growers. Anti-dumping duties are protectionist tariffs a domestic government imposes on foreign imports which it believes are priced below fair market value, making it difficult for the local industry to compete.
“We want a specific outcome that recognises Australia's grain growers and barley industry operate in nothing other than entirely commercial ways and with the utmost of integrity,” Mr Birmingham said.
Resolving the dispute through the WTO could take years, he warned.
It’s further complicated by the fact the appeals mechanism within the international trade body is paralysed after the Trump administration blocked appointments to the appellate body.
Senator Birmingham said the prospect of an appeal was some way off.
He is ultimately hopeful the WTO will push China to change its ways after finding the Chinese government’s claims about the Australian barley industry are not backed up by evidence.
“We have full confidence that they are not unduly subsidised and did not dump that product in global markets,” he said.
Mr Birmingham said he anticipated that other nations would become third-parties in the legal proceedings – something that he welcomed.
“It is quite common for other countries to become third parties to proceedings in the WTO,” he said.
China has remained outwardly furious with the Australian government, raising a slew of concerns about foreign interference and investment laws, as well as prime minister Scott Morrison’s push for an independent inquiry into the origins of the novel coronavirus.
What happens next?
Melbourne law professor and international economic law expert, Tania Voon, said a best-case scenario would see the dispute worked out before a verdict was reached by the WTO.
“If there was a finding against China, China would be required to bring its measures into conformity with WTO law, meaning usually it would probably have to remove the measures or reduce them ... or conduct its investigation again,” she told the ABC on Wednesday afternoon.
“If China didn't do that, in the interim, there could be a temporary solution where Australia could retaliate against China in the form of trade sanctions ... That isn't the best way of resolving a dispute,” she admitted.
Prof Voon is a former Legal Officer of the Appellate Body Secretariat of the WTO and said, for Australia, it would be preferable if a resolution was reached without a trade war, or a long wait for a mandate from the global trade umpire.
“It would be better that China brought its measures into conformity or even better, they could be resolved without a formal WTO panel. As discussed in the press conference just now, that would take some time and possibly years.”
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