(Bloomberg) -- Australia will challenge tariffs imposed by China on its barley exports through the World Trade Organization, the government said Wednesday, in a further sign that relations between the two key trading partners are deteriorating.
Trade Minister Simon Birmingham said the government had advised counterparts in Beijing of its intention “to request formal consultations with China.”
“We will make this formal request to the WTO tonight,” he told reporters. “WTO dispute resolution processes are not perfect, and they take longer than would be ideal, but ultimately, it is the right avenue for Australia to take.”
Barley was slapped with tariffs of over 80% in May after China accused Australia of dumping the grain and subsidizing growers. So far this year, China has hit Australia with a raft of trade restrictions on products including copper, wine, timber and lobster amid deteriorating diplomatic ties.
Relations between China and Australia have been fraught since 2018 when Canberra barred Huawei Technologies Co. from building its 5G network on national security grounds, and worsened this year after Prime Minister Scott Morrison’s government called for an international inquiry into the origins of the coronavirus. Beijing accuses Canberra of being a puppet of the U.S. and of meddling in its internal affairs.
It’s a marked reversal in the once cordial relationship that saw Australia host a state visit by President Xi Jinping in 2014 and sign a comprehensive free-trade agreement a year later.
Birmingham said the WTO process could takes years to be resolved. He said he wants the organization to recognize that the tariffs are “not underpinned by facts and evidence,” which could ultimately lead to China changing its practices.
“We are highly confident that based on the evidence, data, and analysis that we have put together already, Australia has an incredibly strong case to mount,” he said.
Coal is also being impacted. More than 50 vessels carrying Australian coal have been stranded off China after ports were verbally told in October not to offload such shipments. China’s National Development and Reform Commission on Saturday appeared to formalize those curbs after giving power plants approval to import coal without restrictions, except from Australia, under efforts to tame price gains, the Global Times reported.
If that proved to be correct, such a ban would also breach WTO rules and the free-trade agreement that China and Australia signed in 2015, Morrison told reporters Tuesday.
(Updates throughout)
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