{"id":23406,"date":"2020-12-19T01:42:42","date_gmt":"2020-12-19T01:42:42","guid":{"rendered":"https:\/\/www.lifeandnews.com\/articles\/?p=23406"},"modified":"2020-12-21T12:59:45","modified_gmt":"2020-12-21T12:59:45","slug":"23406-2","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/23406-2\/","title":{"rendered":"Taking China to the World Trade Organisation plants a seed. It won\u2019t be a quick or easy win"},"content":{"rendered":"

<\/h1>\n
Richard Wainwright\/AAP<\/span><\/span><\/p>\n<\/figcaption><\/figure>\n

Weihuan Zhou<\/a>, UNSW<\/a><\/em> and Lisa Toohey<\/a>, University of Newcastle<\/a><\/em><\/p>\n

Australia is reportedly ready<\/a> to initiate its first litigation against China at the World Trade Organisation.<\/p>\n

China has this year taken punitive action<\/a> against imports of Australian coal, wine, beef, lobster and barley.<\/p>\n

It is the five-year 80.5% barley tariff China imposed in May that Australia will take to the World Trade Organisation. More than half of all Australian barley exports in 2019 were sold to China, worth about A$600 million a year to Australian farmers.<\/p>\n

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\nCC BY<\/a><\/span><\/figcaption><\/figure>\n
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Chinese authorities began an anti-dumping investigation into Australian barley in November 2018<\/a>. Anti-dumping trade rules are meant to protect local producers from unfair competition from \u201cdumped\u201d imported goods.<\/p>\n

Dumping occurs where a firm sells goods in an overseas market at a price lower than the normal value of the goods. China calculated the normal value of barley using \u201cbest information available\u201d on the grounds that Australian producers and exporters failed to provide all information Chinese investigators requested.<\/p>\n

The barley tariff will last for five years unless Chinese investigators initiate a review and decide to extend it beyond 2025.<\/p>\n

What can Australia hope to achieve from a WTO dispute?<\/p>\n

Not a quick and easy win. A formal resolution will likely take years. But it plants a seed, starting a structured process for dialogue. This is an important step in the right direction.<\/p>\n

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\n
\nRead more:
\nBarley is not a random choice \u2013 here’s the real reason China is taking on Australia over dumping<\/a>
\n<\/strong>
\n<\/em><\/p>\n

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A lengthy process<\/h2>\n

WTO litigation is no quick fix. There is a set process that moves through three phases \u2013 consultation, adjudication and compliance.<\/p>\n

The standard timetable would ideally have disputes move through consultation and adjudication within a year. In reality it often take several years, particularly if appeals or compliance actions are involved.<\/p>\n

The timetable schedules 60 days for the first stage of negotiations, though these can take many more months. That\u2019s worthwhile if it leads to a resolution. But given the tensions between China and Australia, a quick resolution looks remote.<\/p>\n

The adjudication process typically involves a decision by a WTO panel followed by an appeal to the organisation\u2019s Appellate Body.<\/p>\n

A WTO panel is meant to issue its decision within nine months of its establishment, but it usually takes much more time. If the panel\u2019s decision is appealed, the Appellate Body is meant to make its decisions within 90 days, but nor is this time frame met in many cases.<\/p>\n

Once a WTO decision is final, it is up to the losing party to comply with the ruling. That may include a request for time to make the necessary changes. In practice, this can take six to 15 months<\/a>.<\/p>\n

\"Barley
China\u2019s tariff on Australian barley comprises an \u2018anti-dumping duty\u2019 of 73.6% and a \u2018countervailing duty\u2019 of 6.9%.<\/span>
\nTed S. Warren\/AP<\/span><\/span><\/figcaption><\/figure>\n
\n


\n
\nRead more:
\nAn all-out trade war with China would cost Australia 6% of GDP<\/a>
\n<\/strong>
\n<\/em><\/p>\n

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Appeals blockage<\/h2>\n

One complication is the current non-functioning WTO appeals process. Appointing judges to the WTO\u2019s Appellate Body requires agreement from all WTO member nations. US obstruction<\/a> of new appointments has reduced the number of judges to zero, and the Appellate Body requires three judges to hear appeals.<\/p>\n

This paralysis has created a major loophole, enabling an \u201cappeal into the void\u201d to block unfavourable rulings.<\/p>\n

In light of this, the 27 European Union nations and 22 other WTO members \u2013 including both China and Australia \u2013 have signed on to a temporary appeals process known as the \u201cmulti-party interim appeal arbitration arrangement<\/a>\u201d (MPIA).<\/p>\n

Given China\u2019s commitment<\/a> to the WTO and its dispute settlement system, there is no reason to anticipate it snubbing interim arrangements if an appeal arises. But the appeal process is also likely to take just as long as the Appellate Body procedure.<\/p>\n

No guaranteed win<\/h2>\n

Federal Trade Minister Simon Birmingham has expressed confidence in Australia\u2019s \u201cstrong case<\/a>\u201d but victory against China is not assured.<\/p>\n

China\u2019s tariff on Australian barley comprises an \u201canti-dumping duty<\/a>\u201d of 73.6% and a \u201ccountervailing duty<\/a>\u201d of 6.9%. Anti-dumping and countervailing calculations are highly technical. Whether China\u2019s barley tariff has violated WTO rules will require detailed examination of its methodology.<\/p>\n

A key challenge to the Chinese methodology is that it largely disregarded information on domestic sales by Australian barley producers and used data from Australian sales to Egypt.<\/p>\n

The WTO has found China\u2019s use of similar methods in several past disputes<\/a> breached WTO rules. But every case depends on very specific facts. The past rulings against China do not necessarily predict the result here.<\/p>\n

\n


\n
\nRead more:
\nWhy China believed it had a case to hit Australian barley with tariffs<\/a>
\n<\/strong>
\n<\/em><\/p>\n

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No compensation<\/h2>\n

Even if Australia is successful, a \u201cwin\u201d isn\u2019t total.<\/p>\n

The WTO system is designed to make states change their ways. It is not designed to compensate those harmed by illegal trade measures. In other words, an Australian win may require China only to remove the tariff, not compensate those who paid more or lost revenue as a result.<\/p>\n

There is also a risk that China could simply initiate a re-investigation of the barley tariff, which might lead to a decision to impose duties very similar to the original ones. In some past disputes, it took China five years or longer<\/a> to remove duties.<\/p>\n

So even if the World Trade Organisation rules in favour of Australia, this might not lead to the tariff\u2019s end before its current expiry date in 2025.<\/p>\n

Still the best option<\/h2>\n

Despite all this, the World Trade Organisation is Australia\u2019s best step.<\/p>\n

The WTO is not perfect, but it is now a tested and respected mechanism to resolve trade disputes.<\/p>\n

WTO litigation also compels the disputing parties to enter into consultations \u2013 and talking is something Australia\u2019s officials have had difficulty having with their Chinese counterparts.<\/p>\n

China might drag its heels in other ways, but it can be expected to respect the WTO\u2019s procedural rules and enter into these negotiations. Those talks could help repair communication channels better than missives through social media and press conferences.<\/p>\n

\"Chinese
Chinese Foreign Ministry spokesperson Zhao Lijian, at a briefing in Beijing on November 17, says Australia should do something \u2018to promote mutual trust and co-operation\u2019 in response to Australian Trade Minister Simon Birmingham calling for dialogue and discussion.<\/span>
\nAP<\/span><\/span><\/figcaption><\/figure>\n

Litigation the new normal<\/h2>\n

In commencing a formal dispute, Australia also sends a firm but dignified message \u2013 that it is willing to use international rules and procedures to solve grievances.<\/p>\n

WTO litigation is a normal feature of trade relations between countries. Even close allies bring disputes against one another \u2013 such as New Zealand\u2019s case against Australia\u2019s restrictions<\/a> on New Zealand apples, or Australia\u2019s case against Canadian restrictions <\/a> on imported wines in liquor stores.<\/p>\n

China and Australia badly need a relationship reset<\/a>. Meeting in a rules-based forum with structured processes for dialogue can do no harm.\"The<\/p>\n

Weihuan Zhou<\/a>, Senior Lecturer and member of Herbert Smith Freehills CIBEL Centre, Faculty of Law, UNSW Sydney, UNSW<\/a><\/em> and Lisa Toohey<\/a>, Professor of Law, University of Newcastle<\/a><\/em><\/p>\n

This article is republished from The Conversation<\/a> under a Creative Commons license. Read the original article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Richard Wainwright\/AAP Weihuan Zhou, UNSW and Lisa Toohey, University of Newcastle Australia is reportedly ready to initiate its first litigation against China at the World Trade Organisation. China has this year taken punitive action against imports of Australian coal, wine, beef, lobster and barley. It is the five-year 80.5% barley tariff China imposed in May […]<\/p>\n","protected":false},"author":44,"featured_media":23407,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5,277],"tags":[9157,9154,4348,9156,9158,9155],"_links":{"self":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/23406"}],"collection":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/comments?post=23406"}],"version-history":[{"count":2,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/23406\/revisions"}],"predecessor-version":[{"id":23422,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/23406\/revisions\/23422"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media\/23407"}],"wp:attachment":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media?parent=23406"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/categories?post=23406"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/tags?post=23406"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}