WTO to review EU-Malaysia palm, China-Australia barley cases
The World Trade Organization established two expert panels late last week to review complaints around ChinaвЂ™s imposition of...
The World Trade Organization agreed to establish two expert panels late last week to review complaints around China’s imposition of duties on Australian barley exports and the EU’s decision to ban the use of palm oil and palm oil-based feedstocks to biodiesel production.
The moves were initially delayed as both China and the EU blocked complaints from Australia and Malaysia respectively, but under WTO rules any request to investigate trade restraints can only be turned down once.
As such, the WTO announced on Friday it would establish two panels in response to the two complaints.
Australia’s complaint to the trade body related to the levying of anti-dumping duties of 73.6% and countervailing duties of 6.9% imposed on barley exports after concluded an investigation in May 2020.
The investigation had been initiated back in late 2018 and came amid mounting tensions over Chinese military activity in the South China Seas, an area that is also of strategic interest to Australia.
Despite holding talks in January 2021, the two nations could not resolve the differences.
The WTO’s Dispute Settlement Board (DSB) agreed to establish a panel with Canada, the EU, the US, India, Russia, Singapore, Norway, the UK, Japan, New Zealand, Brazil and Ukraine reserving a right to participate in the proceedings.
Australia’s exports of barley to China peaked at 6.2 million mt in the 2017 calendar year, according to the Agricensus Export Dashboard, before falling to 1.6 million in 2019 and 1.5 million in 2020.
Over the same period, exports from Ukraine, Russia and the EU have also stepped up.
The WTO also agreed to establish an expert panel to examine the details of a long-running dispute between Malaysia and the EU about curbs that the 27-nation bloc has placed on palm oil-based biofuels, a key step in the process that is unlikely to be concluded until well into 2022.
The move comes against the backdrop of recent 13-year highs in crude palm oil prices, but also a multiyear high in soybean oil and a record high in rapeseed oil, which has meant palm oil has remained competitive as a feedstock in some countries in the European biodiesel market.
But in recent months, several European countries, such as Germany, Belgium and Austria have moved to ban palm oil in biodiesel well ahead of the EU’s mandated 2030 phase-out date, measures that are likely to erode demand in the next few years in favour of other feedstocks.
Malaysia first requested a WTO arbitration panel in January, claiming that the EU, and in particular member states France and Lithuania, had imposed restrictive measures on the use of palm oil in violation of international trade agreements.
The EU blocked this initial demand for a panel to be formed, contending that its curbs on palm oil are environmental laws permitted under trade rules.
Malaysia’s palm oil exports in 2021 are expected to be the lowest in four years because of the EU’s curbs, which will start to cap the volume of palm oil from 2023.
Meanwhile, exports from Malaysia of palm oil-based biodiesel to Europe are far lower this year, at around half of those shipped by this stage last year.