Australia takes China to global trade body over wine duties

By AFP

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Sydney. Australia will take China before the World Trade Organization over Beijing’s imposition of

crippling tariffs on Australian wine exports, it announced Saturday, in the latest sign of worsening tensions between the two countries.

The decision “to defend Australia’s winemakers” comes six months after Australia lodged a separate protest at the WTO over tariffs on Australian barley and is in line with the government’s “support for the rules-based trading system”, it said in a statement. It added, however, that “Australia remains open to engaging directly with China to resolve this issue”.

It is the latest incident in an escalating tussle between Australia and its largest trading partner and follows warnings by Prime Minister Scott Morrison that his government would respond forcefully to countries trying to use “economic coercion” against it.

China in November slapped tariffs of up to 218 percent on Australian wines, which it said were being “dumped” into the Chinese market at subsidised prices.

The crackdown virtually closed what had been Australia’s biggest overseas wine market, with sales falling from Aus$1.1 billion (US$ 840 million) to just Aus$20 million, according to official figures.

“The actions taken by the Chinese government have caused serious harm to the Australian wine industry,” Trade Minister Dan Tehan said at a press conference announcing the decision to lodge a formal dispute with the WTO.

“We would love to be able to sit down and be able to resolve these disputes” directly with the Chinese, he said, but added that lower-level official contacts had failed to make progress.

“We will use every other mechanism to try and resolve this dispute and other disputes that we have with the Chinese government,” he said.

Tehan acknowledged that the dispute process within the WTO was difficult and estimated it would take two to four years for any resolution.

Coercive behaviour

Beijing has imposed tough economic sanctions on a range of Australian products in recent months, ranging from high tariffs to disruptive practices across several agricultural sectors, coal, wine and tourism.The measures are widely seen in Australia as punishment for pushing back against Beijing’s operations to impose influence in Australia, rejecting Chinese investment in sensitive areas and publicly calling for an investigation into the origins of the coronavirus pandemic.