Australian barley growers pinning their hopes on a tariff resolution with China through the World Trade Organization (WTO) could face a frustrating process.
- Seeking redress through the WTO can be a long and protracted process, as the sugar industry has found
- There are multiple mechanisms available to resolve disputes, with many settled through negotiation
- The conduct of any process is likely to be hampered by the ongoing coronavirus crisis
This week China imposed an 80 per cent tariff on Australian barley imports for the next five years, claiming the product had been imported against trade rules.
Agriculture Minister David Littleproud said Australia was still working through the claims, but was serious about prosecuting its case through the WTO if it could not reach a resolution with China.
“If we believe that we haven’t been understood appropriately, then the next course of action for us is to refer it to the World Trade Organization,” Mr Littleproud said.
“We took India to the WTO on sugar, so … we have a strong and proud record of standing up for Australian farmers, but we do that calmly and methodically after understanding the facts and the evidence provided to us.”
But that process could be a long and protracted one, as Australia’s sugar industry has found.
In 2018, the Australian Government actioned a process in the WTO, accusing India of distorting the global sugar price through subsidies.
Last year the WTO agreed to establish a panel to investigate and rule on whether India’s high sugarcane prices and export subsidies exceeded its WTO obligations.
But the process has been further complicated by travel restrictions and India has refused to participate in online hearings.
“We’ve got now a bit of a wait to see what the global response is to travel and lifting of restrictions,” said David Rynne, economics, policy and trade director with the Australian Sugar Millers Council.
Mr Rynne said when trade rules were breached and countries aggrieved, there were multiple mechanisms available to resolve disputes.
“What we’ve see over the years, since the WTO was formed, is that roughly 50 per cent of grievances get sorted out diplomatically … countries get in a room and they sort it out and something is negotiated.
“The other 50 per cent of the time, when those negotiations break down, the option for parties is the WTO and that’s what’s happened in the sugar case.
“Hopefully the parties get together and resolve the issues without having to go down that WTO process.”
Mr Rynne said he was very confident that, in the case of the sugar industry, there were clear breaches and that the umpire’s decision would go Australia’s way.
“[But] we need governments to make sure that the WTO framework holds together and there is a mechanism by which countries like Australia and aggrieved industries … have an avenue to be able to say, ‘Hey, there’s a distortion, there’s an inequity happening here, it needs to be resolved or the viability of certain industries is at risk,'” he said.
Mr Rynne said Australia, as a small open economy, had benefitted from free trade over a long period of time.
“We’ve opened ourselves up to competition and we’ve borne the fruit of that through enormous efficiencies and productivity gains in what we do,” he said.
“Not all countries think the same — a lot of countries think very internally, it’s about protectionism, it’s about control and regulations.
“Generally I think the global trend is for countries to become a little bit more insular, to protect themselves, not be as exposed as what they were.