Breaking: Australia takes China to WTO over barley tariffs

After failed attempts to start a dialogue with China over the tariffs that have crippled the Australian barley trade to China, the Federal Government says it has no recourse but to head to the WTO to seek redress.

It is not the first time Australia has taken a country to the WTO - it has done so with wine tariffs imposed by Canada and sugar tariffs imposed by India.

Australia insists that the Chinese tariffs announced earlier this year are unfair and unjustified and denies it has been dumping barley in the Chinese market.

Federal Agriculture minister David Littleproud said the decision was taken to head to the WTO after consultation with the grains industry - and it was not taken lightly.

He cautioned though that the WTO process is lengthy and may take up to two years. The outcome was to hopefully have the WTO direct China to remove the tariffs, if Australia's case is upheld, and therefore let the trade resume.

Of course, any resumption of trade would have to be seen in the light of the ongoing trade issues with China that has already seen a large number of major Australian exports including coal, wine, cotton, seafood and some beef imports strangled by tariffs or orders to Chinese wholesalers and industry not to buy.

Mr Littleproud told The Land that Australia would challenge the Chinese barley tariffs in the WTO.

"Australia has never subsidised and then dumped barley in China," Mr Littleproud said.

"We've exhausted all other options. China has failed to engage in dialogue on this, so we are left with just this process.

"We made a commitment to consult with industry and to strike the right balance and this is a process we will respect, so we tried all these things before we went down this road (to the WTO)."

Federal trade minister Simon Birmingham said the government had made the decision to go to the WTO after extensive consultation with the grains industry.

"Whilst Australia respects China's right, as with any nation, to undertake domestic investigations into anti-dumping matters, we do not agree with China's decision to impose anti-dumping and countervailing duties on Australian barley," Mr Birmingham said.

"Australia's decision to take this step is consistent with our previous use of WTO processes," he said.

Mr Birmingham said the government had been unable to establish a dialogue with China on the matter.

"We have continued to raise our concerns with China on numerous occasions both bilaterally and through the relevant WTO committees," he said.

"We remain disappointed that China has not engaged with Australia to address these concerns and now believe that calling in the independent umpire is the most appropriate course of action to resolve this dispute."

The Chinese tariffs left Australia with a 3.4m tonne barley sales gap to fill after the decision was announced in May. Many farmers though chose not to plant barley this year. Western Australia is the barley hub in Australia.

Australia has the opportunity to forge new markets in the Middle East with Saudi Arabian Red Sea ports keen to accept barley, according to recent reports.