Australia is suing China at the WTO to show it will not bow to Pressure from Beijing

Australia filed a formal appeal with the World Trade Organization on Wednesday over China’s decision to impose high tariffs on barley exports to China.

Simon Birmingham, Australia’s trade minister, told the press that Beijing’s imposition of anti-dumping and countervailing duties of up to 80 per cent on Australian barley in May had effectively disrupted the trade. Australia has no choice.

Birmingham argued that Australia had a strong case.

The Reuters news agency said a WTO official confirmed the group had received Australia’s request for advice and that China and Australia would begin a formal 60-day consultation period in accordance with wto procedures before the relevant arbitration panel is established.

Reuters said Australia’s move could worsen already strained relations with China.

Over the past few months, China has taken a variety of trade sanctions against Australia, including barley, wine, seafood, copper, coal, timber, education, tourism and more. Formal channels of communication between the two governments have all but collapsed.

China is Australia’s largest trading partner, with two-way trade reaching $170 billion last year.

The deterioration began in 2018 when Australia banned Chinese network equipment maker huawei for national security reasons from building 5G networks in the country. Most to Beijing’s annoyance, Australian Prime Minister John Morrison in April called for an independent international investigation into the origin of novel Coronavirus, which began in China.

Beijing’s mishandled response in the early days of the epidemic drew widespread international condemnation. To evade international accountability, observers say, the Communist party leadership is eager to find ways to outdo other countries on the origin of the virus. By pointing the finger at China at this point, Morrison has triggered Beijing’s determination to put full pressure on Canberra.

Birmingham denied Canberra offered any subsidies to Australian barley producers and criticised China for doing so without any facts or evidence. It is widely believed in the international community that China’s actions are purely political retaliation.

At Wednesday’s press conference, Chinese Foreign Ministry spokesman Wang Wenbin also indirectly acknowledged that China’s real intention in cracking down on Australia was to force Canberra to change its unfriendly attitude toward China.

Wang said that China has stated its position on many occasions and Australia should take China’s concerns seriously and take concrete actions to correct the discriminatory practices of Chinese companies.

At his press conference on Tuesday, Mr Wang made three points that made China very unhappy: first, more than a dozen Chinese investment projects in Australia since 2018 have been rejected by The Australian side “on trumped national security grounds”. The second is to ban Huawei from participating in 5G projects in Australia. Third, Australia has launched 106 anti-dumping and anti-subsidy investigations against China, while China has launched only four such investigations against Australia.

According to WTO procedures, if there is no progress during the consultation, the WTO will set up a panel of three experts to investigate the case. The process could take years. Even if the panel decides, the defendant has the right to appeal.

As a result, analysts say, the Australian government’s wto case against China makes more political than economic sense. It simply shows China and the world that Australia will not give in to Chinese repression.

In announcing Australia’s appeal against the WTO decision Wednesday, Birmingham also acknowledged that the move was “not the perfect approach and would take a long time, but it is the right path for Australia to take at this time.”