Independent umpire 'the next step': Australia set to take China to the WTO over barley dispute

Senator Birmingham confirmed the government was now talking with the industry about taking Beijing to the WTO, saying: "I expect that is the process we will go through."

He said there were "differing opinions" from the industry, "but on the whole, Australia stands by the rules-based system for international trade, and if you stand by the rules-based system, you should also use that rules-based system, which includes calling out when you think the rules have been broken, and calling in the international umpire to help resolve those disputes".

"Again, we're disappointed at the fact that all of the evidence – compelling as we are confident it is – was rejected by the Chinese authorities and that appeal was unsuccessful," Senator Birmingham told the ABC's Insiders on Sunday morning.

"So now the WTO appeal for barley is the next step.

"We are engaging there with the grains industry and other sectors to make sure we have strong industry buy-in."

While Beijing first started the anti-dumping process on Australian barley two years ago, it has ramped up its pressure on the Morrison government this year. Diplomatic disputes over China's coronavirus response, human rights breaches and territorial expansion culminated in recent weeks when the Chinese embassy issued a list of 14 grievances with Australia to Nine News, The Sydney Morning Herald and The Age.

Senator Birmingham directly linked Beijing's list of grievances with the trade dispute and said "that's not the way our embassy in Beijing operates".

"There's a cumulative effect dating back over quite a period of time – indeed, going potentially all the way back a couple of years ago, when China instigated its investigation into the barley industry that led to anti-dumping duties being applied there, and a range of other adverse decisions," he said.

"So I can truly understand why the perception is growing, particularly off the back of the remarks that China's ambassador made in Australia earlier this year, that there are other factors driving this beyond those claims of dumping, or the like, that China makes.

"Because we know that Australia's wine producers, far from dumping their product in China, actually get their best price per litre in the Chinese market compared with any of their other export markets. So we are a high-priced wine exporter into China."

Australia has made a number of decisions in recent years that have upset Beijing, including enacting laws to counter foreign interference, banning Chinese telco Huawei from next-generation networks, and calling for an independent global inquiry into the coronavirus.

Agriculture Minister David Littleproud said the perception was growing that China was initiating the trade disputes because of Australia's "sovereign actions".

"We took it on face value, the actions China implemented against barley, timber, and now wine. But subsequently, they’ve made statements, assertions and grievances around some of the actions – sovereign actions – of our country," Mr Littleproud told Sky News.

"Now that obviously leads to the perception, quite rightly, that the actions that they are taking against our commodities is more around their grievances around our sovereignty, and our sovereign actions, than it is anything to do with trade.

"So it’s important now for Chinese officials to quite clearly articulate and demonstrate that that is not the case."

Mr Littleproud said Australia expected its trading partners to act fairly, and "if they don't, we will go to the umpire".

Flagging the prospect of compensation for industries hit by China's trade strikes, Prime Ministrer Scott Morrison said the government would be looking at "how we can get a number of our producers through this difficult time".

"We have done that through COVID as people would know. The airlines basically shut down and the planes weren’t there to (carry) things like crayfish and other things," he told ABC radio.