Australia has reserved the right to take China to the World Trade Organization to pressure it to reverse a decision to impose a whooping 80 per cent tariff on Australian barley.
China has imposed harsh taxes on Australian barley with separate tariffs of 73.6 per cent for dumping allegations and 6.9 per cent over supposed government subsidies.
Both claims have been emphatically denied by the government and farmers.
The taxes on barley, which are set to remain in place for five years, represent another breakdown in a deteriorating relationship between Canberra and China.
Australia's Trade Minister Simon Birmingham had attempted to meet with his Chinese counterpart before the verdict was announced, but his requests were ignored.
Australian Trade Minister Simon Birmingham says China is hampering global economic recovery from COVID-19. Source: AAP
He labelled China's tariff move deeply disappointing.
"China's decision is one that does concern us deeply, because it appears to have been based, without a proper understanding of the facts or the evidence," he said.
China has claimed the barley farmers receive substantial subsidies from Canberra.
Minister for Agriculture David Littleproud at a press conference at Parliament House. Source: AAP
But Agriculture Minister David Littleproud has rejected the premise that Australian barley farmers were being subsidised in "any way, shape or form".
He also rejected the assertion that the dispute marks a "trade war" between the major trading partners.
"There is no trade war," he said.
"Everyone needs to take a deep breath, take a cold shower and understand that we produce the best food and fibre in the world."
He said Australia was open to taking an appeal of the Chinese tariffs to the World Trade Organization.
"We will continue to prosecute that case ... and reserve our right to go to the World Trade Organization to get the independent umpire to make that determination," he said.
Farmers have also emphatically denied the accusations of government subsidies.
Grain Producers Australia chairman Andrew Weidemann said the tariffs would have a huge impact on the industry.
"Most growers are completely gutted with the news," he told Sky News on Tuesday.
"It's really a bitter blow to the Australian economy as well."
He said farmers would lose $500 million in value out of the current crop, which most growers have just finished planting.
China has imposed an 80 per cent tariff on Australian barley. Source: GRAINCORP LIMITED
National Farmers' Federation chief executive Tony Mahar said China's claims were completely false.
"It is particularly devastating after the time that Australian farmers have had in the last number of years with droughts, floods and fires," he told ABC News Breakfast.
China's Ministry of Commerce has argued dumping by Australia has caused significant damage to its domestic industry as a result, following an inquiry that began in 2018.
“The investigating authority finally ruled that there was a subsidy for imported barley originating in Australia, the domestic barley industry was substantially damaged, and there was a causal relationship between the subsidy and the actual damage,” the Chinese Ministry of Commerce announced.
Australia is the biggest barley supplier to China, exporting about $1.5 billion to $2 billion worth a year, which is more than half its exports.
The product is used both for brewing and animal feed.
Diplomatic tensions between Canberra and Beijing have escalated after Australia pushed for an inquiry into the origins of coronavirus.
"I can understand why people draw those links - particularly given the unhelpful comments of the Chinese Ambassador to Australia a few weeks ago," Mr Birmingham said.
"In the end, China denies there's a link. The only thing we can do in defence of our farmers is engage in the process as constructively as we can."
More than 110 nations including China backed the inquiry at the World Health Assembly on Monday night.
Producers will be on the hunt for new export markets with India and Indonesia, which has recently signed a trade deal with Australia, considered prime options.
Mr Littleproud said Australia would continue to work with its trading partners to export Australian barley.
"The Middle East - Saudi Arabia is our fourth-largest partner with barley and there's other nations within the Middle East that are keen to take our barley," he said.
"So we'll pursue other markets as quickly as we can."
The global trade umpire could take up to three years to deliver a decision if Australia decides to pursue an appeal.
The punitive tariffs come a week after China banned meat imports from four Australian abattoirs.
Beijing's ambassador in Canberra has also raised the prospect of consumer boycotts over the coronavirus inquiry.
With AAP
