Australia's barley trade to China can resume as normal today -- after China announced it would drop the 80 per cent tariffs which had been in place for three years. The government hopes this might pave the way for further restrictions to be lifted on other Australian exports.
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00:00 China introduced these tariffs accusing Australia of selling barley below the cost of production
00:07 and subsidising farmers, something which Australia has always denied.
00:12 This set off a period of heightened trade tensions and was widely considered a form
00:18 of retaliation against Australia's calls for an investigation into the origins of COVID-19.
00:25 When the tariffs were introduced, the barley trade to China was worth around $1 billion
00:30 a year at its height.
00:33 Australia took the tariffs to the World Trade Organisation in 2020, but earlier this year
00:38 agreed to suspend that dispute in favour of negotiations with China within a period of
00:44 three months.
00:45 Now, China was granted a one-month extension not long ago and made yesterday's announcement
00:51 less than a week out from the final deadline.
00:55 This news has of course been welcomed by business leaders and grain producers while acknowledging
01:02 that it has come at a significant cost to the industry.
01:06 On the back of the last four really good seasons across Australia, particularly for the east
01:11 coast of Australia, we've seen somewhere in the order of $2.5 billion loss in economy
01:18 in gains from the barley, particularly the moulding barley that we were selling into
01:22 the Chinese market at its peak.
01:24 We were selling up to 6 million tonnes per annum in the last throws before the tariff
01:29 was introduced.
01:30 So that market was stopped overnight.
01:32 And of course we saw a $50 a tonne drop in the value of the crop straight away because
01:37 we only had feed markets available to us, not moulding markets, which is the premium
01:41 market for beer producers.
01:45 There are still other trade restrictions yet to be resolved and the chair of the China
01:49 Australia Business Chamber, Vaughan Barber, told me that tariffs were identified as one
01:55 of the key challenges for Australian businesses in a survey of their members last year.
02:00 But he did also say that this development makes for a more positive outlook for Australian
02:05 businesses wanting to operate in China.
02:08 The Australian government too has welcomed this news and says that they hope this process
02:12 could serve as a model to resolve the current tariffs that are in place on Australian wine.
02:18 And as the Trade Minister said, we would seek to undertake a similar approach on wine.
02:26 We have a dispute before the WTO in relation to wine.
02:30 We are confident of our case and we retain our view, which we have expressed publicly
02:37 and to the Chinese officials, that it is in the interest of both countries for these impediments
02:42 to be removed.
02:44 While trade restrictions remain on Australian wine, lobsters and some abattoirs, this development
02:51 is the latest sign of a thawing in Australia-China relations.
02:55 However, there are still questions as to whether Prime Minister Anthony Albanese will travel
03:00 to China later this year, having been invited, while Australian journalist Chung Lei and
03:06 writer Yang Hanzhong remain detained by Chinese authorities.
03:10 [BLANK_AUDIO]