China has agreed to remove its highly restrictive tariffs on the importation of Australian barley in a major boost to the relationship between the two nations.
The tariffs of up to 80 per cent were introduced in 2020 in what was widely seen as retaliation for Australia backing calls for an investigation into the origins of COVID-19, and sparked a trade war with our largest trading partner.
"It is 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," the Chinese Ministry of Commerce said in a statement.
The breakthrough comes after months of talks from federal Trade Minister Don Farrell, including an official visit to China in May.
"It's another very positive step in the full resumption of normal trade between Australia and China," Farrell said.
"The dialogue, the goodwill, the patience and the persistence have proven effective in helping Australian barley growers and exporters to achieve an expedited outcome.
"We intend to use this process as a template for resolving the issue in respect of wine, which is still ongoing."
In a joint statement with Foreign Minister Penny Wong and Agriculture Minister Murray Watt, Farrell said the barley tariffs were costing the Australian economy just shy of $1 billion.
"Today the Australian government was notified that from tomorrow, China will remove the 80.5 per cent anti-dumping and countervailing duties on Australian barley," the ministers said.
"We welcome this outcome, which paves the way for our barley exporters to re-enter the Chinese market – benefiting Australian producers and Chinese consumers.
"It affirms the calm and consistent approach that the Albanese government has taken.
"Since May 2020, China's duties on Australian barley have effectively blocked exports to that market, worth about $916 million in 2018-19.
"The removal of duties is the result of work by government and industry to resolve this matter."
Wong said the barley industry has been a success story in diversification.
"Our barley producers have increased their exports to the rest of the world during this period from $400 million to $3 billion, an increase in excess of 600 per cent," she said.
Australia had pursued legal action over the tariffs through the World Trade Organisation (WTO) but suspended that in April of this year in an agreement that saw China review the restrictions, eventually leading to Friday's decision.
However, a similar dispute is still running between the two countries in regard to Australian wine.
"We have been clear that we expect a similar process to be followed to remove the duties on Australian wine," the ministers' joint statement said.
"In the meantime, we are continuing to pursue our wine dispute at the WTO and remain confident in a positive outcome."
Business Council of Australia chief executive Jennifer Westacott welcomed the sanction lift.
"This is an important outcome for Australian business, particularly for our world class grain producers," Westacott said.
"This mutually beneficial outcome is a result of prudent diplomacy and we acknowledge the work of the government to achieve this positive outcome.
"The business sector looks forward to the removal of remaining trade impediments and continuing the process of normalising our trade relationship.
"We must maintain an approach of principled realism.
"Trade between China and Australia is mutually beneficial, and business wishes to see Australia continue to benefit from the opportunities offered by the Chinese economy."
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