Australian barley producers' hopes of an imminent resolution to the ongoing barley tariffs in China have been dashed, with the Department of Foreign Affairs and Trade (DFAT) confirming further delays in the conflict resolution process.
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DFAT said China will ask for an extension of a month as it makes its mind up whether to scrap tariffs in excess of 80 per cent on Australian barley, imposed due to Chinese allegations of Australian dumping of barley back in May 2020.
In recent months the Aussie industry has been optimistic of a swift resolution to the matter, particularly due to improved diplomatic relations between the two nations since the Labor government was elected last year.
A spokesperson for Minister for Trade Don Farrell and Minister for Foreign Affairs Penny Wong said they were disappointed in the further delays to the already long-running process but were hopeful this would be the final delay.
"The Australian Government has been clear in our view that there is no justification for these duties and that it is in both countries' best interest for all trade impediments to be removed," the spokesperson said.
"In April, Ministers Wong and Farrell announced Australia had agreed to temporarily suspend the WTO case for an agreed three-month period, with a possible fourth month if required."
"China has now requested this one month extension, which we have agreed to.
"While we are disappointed China's review could not be completed within the initial three months - we remain hopeful the impediments will be lifted in the near future."
However, the spokesperson said if the issue was not resolved bilaterally then Australia remained open to going back to the WTO.
"If the duties are not lifted at the end of the four-month period, Australia will resume the dispute in the WTO."
The grain trade remains optimistic of the tariffs lifting, opening up access to the potentially lucrative Chinese market.
Pat O'Shannassy, Grain Trade Australia chief executive, said he believed a resolution to the dispute would be mutually beneficial.
"Our view remains that resolving the barley dispute is in the beneficial interests of both China and Australia, and respective industries,"he said.
"The Australian industry has respected and engaged fully with the processes under the dispute, and we look forward to and naturally welcome an amicable resolution."
"China is historically a very important export market for barley from Australia over many decades, with very strong customer relationships and considerable cooperation between industry partners in plant breeding and technical support to meet China's needs."
Mr O'Shannassy said the industry would respond quickly if the Chinese barley market reopened.
"We would expect the industry in China and Australia to positively respond, once agreement has been reached between the respective governments."
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The world feed grain market has fallen in recent weeks on the back of improved US corn crop conditions, meaning Chinese demand for Australian barley will have fallen.
This in turn means there will be less domestic pressure on Chinese officials to remove the tariffs.