‘Loud and clear and terrifying’: China’s barley ban to be felt across boardrooms
China’s move to suspend barley imports from Australia’s biggest grain exporter after allegedly finding pests in shipments was a ‘scary’ escalation of trade tensions and will be felt in the boardrooms of major agribusinesses, a foreign policy expert has warned.
On Tuesday, China's General Administration of Customs announced in its official WeChat account that barley shipments from WA grain co-operative CBH grain would be stopped after pests were found on multiple occasions.
WA barley has been banned for import by Chinese customs.Credit:Bloomberg
Barley has already been dragged into the trade tensions between the two countries after China slapped an 80 per cent tariff on imports in response to claims Australia was dumping low-priced grain in the country, impacting its local producers. That tariff has put a stop to most exports to China.
Perth USAsia Centre research director Jeffrey Wilson said the ban was scarier than anti-dumping investigations and tariffs because at least those could be litigated in the World Trade Organisation, but banning products on food safety grounds was more opaque.
“A lot of people have written it off but there is a real thing about how this food safety thing works that could be really insidious,” he said.
“If a customs inspector says ‘this shipment has a weevil’, they burn it at the port and destroy it. The problem is there is no evidence whether it did or not.
“China’s anti-dumping allegation is manifestly without merit but at least you could take that to WTO. There is a recourse mechanism on anti-dumping duties.
“The problem with food safety is you can just do it and it is no evidence for prosecution.”
Dr Wilson said the message was “loud and clear and terrifying”.
“Even though the dollar impact today is zero, it is actually a signal saying we are willing to use what has previously been an honour based system to whack the s— out of you,” he said.
“It is a muscle flex but it is also saying, we are going to lay ball with something that nobody has played ball with before.
“Every exporter and every major agribusiness in Australia is going to be thinking now, ‘what if they did that to us?' We have no leg to stand on and can’t litigate.”
Dr Wilson said the political intention of the ban was to get the farming sector to lobby the Morrison government within Australia for a less confrontational policy toward China. Relations between the two countries worsened in May when Prime Minister Scott Morrison called for an independent inquiry into the origins of COVID-19.
At the farm level
With most of the barley planted in WA farms before the anti-dumping tariff was announced in May the Grain Industry Association WA still expect about 3.7 million tonnes to be harvested this season, 150,000 tonnes less than the 2019 season.
Esperance farmer and GIWA barley council chair Lyndon Mickel said the ruling by Chinese customs was disappointing because Australia’s grain had rigorous quality control systems in place and had a global reputation for quality.
“It is not ideal when we’re price takers in the farming industry,” he said.
“To have these external factors come in and affect what we’re doing it makes our life harder.
“The margins that we’re on at the moment have reduced significantly in the past ten years and this is another factor that makes it harder for us again.”
Mr Mickel said about 25 per cent of his crop was barley and he would rely on the domestic market but there were other options out there.
WA Farmers Federation chief executive Trevor Whittington had faith in the resilience of farmers and said the ban was just another bump in the road.
“I think farmers are so used to rolling with the punches, whether its exchange rates or interest rates or commodity prices or rainfall or frost, this is just another that we’ve been dealing with every other day,” he said.
A CBH spokeswoman said it had not found any evidence to support the Chinese customs claims.
“CBH confirms that all grain shipments to China have met all government phytosanitary export requirements and is therefore very disappointed to hear of the suspension,” she said.
“We will work with the Australian Government to challenge the suspension.”
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