China Takes on Australia Over Dumping

This week China launched its first ever anti-dumping investigation against Australia, targeting barley exports – but mainly in retaliation against our own anti-dumping measures.

To push Australia to abandon its attachment to anti-dumping measures, China has launched its first ever anti-dumping investigation against us, strategically targeting one of Australia’s major exports - and barley was not a random choice.

China is Australia’s biggest customer for exported barley - it pays A$1.2 billion for 4.2 million tonnes, around 68% of Australia’s barley exports. Barley producers and exporters are spread across many Australian states, and they had been relying on the recently signed China-Australia Free Trade Agreement (ChAFTA), which eliminated Chinese tariffs.

China’s main concern isn’t barley, or the dumping of Australian products - it’s our use of anti-dumping against them. What has really been annoying China has been Australia’s treatment of it as a non-market economy in anti-dumping investigations, going against a commitment we made in 2005 to treat China as a market economy - as a precondition for the negotiation of ChAFTA.

Dumping is essentially price discrimination, in which a producer sells a product to an export market at a lower price than it sells it at home. It is condemned as unfair trade practice, which accords exporters a competitive advantage over producers of similar goods in the market of importation. Anti-dumping actions are permitted under the rules of the World Trade Organisation (WTO) and are used frequently by many nations, including Australia, and our use of anti-dumping action has been on the rise over the past decade. Of the thirty measures currently in force, eighteen apply to China. While their steel industry has been the main focus, many other Chinese industries have also been targeted, including aluminium products, clear float glass, stainless steel sinks, road wheels, solar panels or modules, A4 copy paper, and railway wheels.

After any final determination by China, anti-dumping duties are likely to remain in place for five years, with the possibility of an extension for a further five years. In the past it has imposed anti-dumping duties on the U.S. and EU that exceed 100%.  Their investigation might take a year; however, it is able to impose preliminary duties after 60 days. Australia can challenge the barley investigation in the WTO, but the rules suggest it can only do so after China’s ministry of commerce has made a final decision.