Australia takes wine dispute with China at WTO as sales plunge | Business and economic issues

Wine tariffs imposed by Beijing double or triple the price of Australian wine and make the Chinese market unviable for exporters.

The Australian government said on Saturday that it had filed a formal complaint with the World Trade Organization over the imposition by China of anti-dumping duties on Australian wine exports, scaling back the trade dispute with Beijing.

“The government will continue to vigorously defend the interests of Australian winemakers who use the system established in the WTO to resolve our differences,” said Dan Tehan, Minister of Trade, Tourism and Investment, in a joint statement with Agriculture Minister David Littleproud.

Relations with China, already rocky after Australia banned Huawei from its nascent 5G broadband network in 2018, have worsened since Canberra called for an international inquiry into the origin of the coronavirus, reported for the first time in central China last year.

China, Australia’s largest trading partner, has responded by imposing tariffs on Australian goods, including wine and barley and limited imports of Australian beef, coal and grapes, movements described by the United States as “economic coercion”.

Last year, Australia launched a formal appeal to the WTO seeking a review of China’s decision to impose heavy tariffs on Australian barley imports.

Wine rates double or triple their price and has made the Chinese market inviable for exporters, the Australian government had said before.

Australian winemakers shipped only 12 million Australian dollars (9 million US dollars) of wine to China in the four months from December to March, up from 325 million Australian dollars (243 million US dollars) a year earlier, show industry figures, confirming that strong tariffs are all but sweeping their largest export market.

‘Dispute resolution system’

Earlier in June, Prime Minister Scott Morrison called on the WTO to tackle the struggle between the two countries and days later won the support of the Group of Seven for a tougher stance against the growing impact of the China on world trade.

On Saturday, the government said that despite the complaint, Canberra was ready to cooperate with Beijing.

“Australia remains open to engaging directly with China to resolve this issue,” Tehan and Littleproud said in their release.

Saturday’s move comes just a week after a summit by the G7 group of advanced economies represented Australia’s call for a tougher stance against China’s trade practices and its more assertive stance. in the world.

The G7 summit ended on June 12 with the announcement of US-led plans to counter China’s trillion-dollar “Belt and Road Initiative”, the hallmark of the their efforts to extend economic influence throughout the world.

The group has pledged hundreds of billions of dollars in infrastructure investments for middle- and low-income countries in the world. “Build Back Better World” Project (B3W).

The B3W was seen as destined to compete with China’s efforts, which was widely criticized for saddling small countries with unmanageable debt.

Morrison attended the summit as part of a G7-plus formula that also brought leaders from South Korea, South Africa and India, and made it clear that he will push other nations to take joint action against and China’s aggressive trade policies.

“The most practical way to tackle economic coercion is to restore the global trade body’s binding dispute settlement system,” he said in a speech just before the summit.

“Where there are no consequences for coercive behavior, there is little incentive for restriction,” he said.

Morrison received explicit support in his government’s confrontation with China from the United States, and from French President Emmanuel Macron during a visit to Paris after the G7 meeting.

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