Australia to send China to World Trade Organization over wine tariffs
Australia will appeal to the international trade arbitrator against China’s decision to impose tariffs that can end trade of up to 220% on Australian wine.
- Trade Minister Dan Tehan says China’s actions have caused “serious damage” to Australia’s wine industry
- Wine exports to China fell from $ 1.1 billion to $ 20 million when tariffs were imposed
- The WTO process will likely take several years
This is the second time in six months that Australia has appealed to the World Trade Organization (WTO), after former trade minister Simon Birmingham referred China to the WTO in December over crippling tariffs applied to the barley trade.
Trade Minister Dan Tehan said the Australian government will vigorously defend the interests of the wine industry, accused of anti-competitive behavior by China.
“We would like to be able to sit down (with the Chinese government) and be able to resolve these differences.
“Although we are not in a position to do so, we will use all other mechanisms to try to resolve this dispute and other disputes we have with the Chinese government.”
Australia’s wine exports to China jumped from $ 1.1 billion to $ 20 million after tariffs were introduced last November.
In March, Beijing confirmed the tariffs would apply for five years, ending what had been the wine industry’s most lucrative business.
Resolution likely to take years
This is Australia’s ninth dispute brought to the WTO and follows pressure from industry body Australian Grape and Wine.
“We believe the decision of the Australian government to initiate this process is the right decision,” said Tony Battaglene, Managing Director of Australian Grape and Wine, in response to the announcement.
“We have been consistent in our position that Australian producers have not sold wine into the Chinese market or received trade-distorting subsidies.”
Union adviser Kristina Keneally said the opposition welcomed the decision but criticized the federal government for not opening new markets to Australian producers.
“The fact that Australia has become more and more dependent on China during the eight long years of this liberal government, the fact that we are not the most dependent country on China in the world, shows a failure in trade and a failure when it comes to diplomacy, ”she said.
The WTO is unlikely to reach a resolution on wine tariffs for a few years.
China last year imposed tariffs on Australian barley over similar allegations of anti-competitive behavior, accusing the Australian government of giving subsidies to grain producers.
Overnight, Reuters reported that China is now offering subsidies to its own grain producers.
“China will provide $ 3.1 billion in subsidies to grain producers this year to offset soaring fertilizer and diesel costs,” Reuters reported.
Meanwhile, despite Chinese tariffs on wine and barley, customs bans on meat exporters, and unofficial delays in imports of other Australian products – including cotton, lobster, timber and grapes from table – commodity forecaster ABARES said this week that primary producers are on track to mark their highest-grossing year on record.