This week on GeoPod, Tenjin Consulting's Alexander Downer and Georgina Downer talk to Grain Growers Chair Brett Hosking about the Australia-China barley dispute.
While the story of 2020 will undoubtedly be the the Covid-19 pandemic, for Australia it's also a story of the deteriorating relationship with China and its economic fallout. China has targeted a range of imports from Australia in retaliation for the Australian Government's decisions relating to foreign interference, Huawei, an independent inquiry into Covid-19, the US alliance, statements on Hong Kong, the South China Sea and human rights to name but a few.
Australian exporters of beef, wine, lobster, sugar, timber, copper, coal, and barley have born the brunt of the biggest geopolitical story of our generation. The rise of an increasingly assertive Xi Jinping-led China. China is trying to make Australia the salutary tale for other countries who may seek to challenge China's interests.
For barley, the story begins in 2018 when China launched an investigation into allegations that Australia was dumping barley into the Chinese market and that Australia farmers were being subsidised in violation of WTO rules. China then placed a 80.5 per cent tariff on Australian barley, effectively blocking $500 million per annum in barley exports. This decision took place at the same time as Australia decided to ban Huawei from supplying equipment to Australia's 5G network.
On 16 December 2020, Australia's Trade Minister Simon Birmingham announced Australia would take action in the World Trade Organization (WTO) over China's imposition of anti-dumping and countervailing duties on barley.
The WTO process is not quick. There is no doubt that this dispute will take several years to settle. In the meantime, barley growers will need to find other markets or plant different crops or both. But, the future is still bright. As Brett says, the dispute with China is nothing compared to dealing with a crippling drought. Australian grain growers are used to working in the world's toughest conditions. When one market closes, others will open. And maybe, just maybe, the China market will open back up sooner rather than later.
Finally, Merry Christmas from the team at Tenjin Consulting!