Investigation on China-Australia wine dispute

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The World Trade Organization (WTO) has formally agreed to set up an investigative panel to examine China’s anti-dumping tariffs on Australian wines, a move that will likely anger China after it first blocked Australia’s request in September 2021, says Nathalie Wang, VinoJoy.

The decision was announced on Tuesday Oct. 26 2021 after a meeting in Geneva, four months after Australia first lodged the complaint to the international trade body on China’s anti-dumping tariffs of up to 218% on Australian wines, which had cost Australia hundreds of millions of dollars.

The latest data released by Wine Australia showed that Australia’s wine exports to China has fallen by 77% to AU$274 million in the past 12 months ended in September, which is just one fifth of its peak at AU$1.3 billion. As a result, China’s tariffs have shaved off 24% of Australia’s total wine exports.

At the meeting, explaining on its request, Australia says it is “disappointed that it is not seeing any concrete steps by China to respond to its concerns” but it “values its community and economic ties with China and remains open to further discussions with China, with a view to resolving the issues Australia has raised.”

The China-Australia wine dispute timeline

April 21, 2020Australian Prime Minister Scott Morrison calls for independent probe in to the origin of Coronavirus.
Chinese ambassador to Australia warms that China could retaliate by blocking tourism and wine. April 26, 2020
August 18, 2020China’s ministry of commerce announces it is looking into Australia’s anti-dumping exports of wine to the Chinese market.
China announces another investigation into subsidized Australian wine exports to China August 23, 2020
November 28, 2020China announced an interim anti-dumping tariffs on Australian wine from 107.1% to 212.1%.
China formally announces up to 218.2% tariffs on Australian wines in containers of 2 liters or less. March 28, 2021
June 18, 2021Australia lodges complaint to WTO on China’s imposition of tariffs on Australian wine.
China blocked Australia’s WTO request to examine anti-dumping tariffs. September 27, 2021
October 26, 2021WTO formally forms a panel to investigate China’s anti-dumping tariffs on Australia wines.
Source: Vinojoy

China on the other hand says it will “vigorously defend” its stance and regrets Australia’s decision. “China will vigorously defend its legitimate measures in the proceedings and is confident they are consistent with relevant WTO rules. China remains open to further engagement with Australia in good faith, with a view to positively resolving this dispute,” it says.

Commenting on the Australia’s request to WTO, Tony Battaglene, chief executive at Australian Grape and Wine, told AFR: “We’re not going to get a silver bullet from it. It’s not going to solve the problem unless the international relations improve.”

“But it does give us an exit ramp: it gives everyone the opportunity to shake hands, make up and move on. And to show our customers that we don’t subsidise our production.”

The two countries’ relations sank to historic low after Australian Prime Minister Scott Morrison in April last year called for an independent enquiry into the Coronavirus origin.

The two countries have since engaged in a tit-for-tat trade war, imposing tariffs on each country’s key exports. Australia blocked China’s 5G, silicon metal, steel and copper, while China retaliated by imposing tariffs on Australian beef, barley, coal, timber, wine and lobster.

Before the imposition of tariffs, Australia was China’s biggest wine supplier, accounting for nearly 40% of China’s imported wine market, but the duties have effectively closed the Chinese market to Australian wine, reducing its share to just 6%, as we have reported.