Australia brings Chinese wine tariffs to WTO as relations deteriorate

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Australia will appeal to the World Trade Organization over China’s imposition of anti-dumping duties on the country’s wine, the trade minister said on Saturday, the latest decision in a long row that has worsened relations between the two countries.

The decision to file a dispute settlement request was made following extensive consultation with Australian winegrowers who collectively saw exports drop from A $ 1.1 billion (A $ 823 million) to around 20 million Australian dollars under a scheme that places tariffs up to 218%, Dan Tehan said in a statement.

The move is the first official step on wine in an increasingly deep line that has led to a frosty relationship between Canberra and its largest export trading partner. The main commodity buyer said in March that Australian wine was subsidized and sold below market value, a view that the Australian government rejected. The move comes after Tehan told Bloomberg Television on Wednesday that the government “will make a decision very soon.”

“Australia’s use of the WTO in this case is consistent with its previous use of the WTO and aligns with our support for the rules-based trading system,” Tehan’s office said. Australia remains open to engage directly with China to resolve this issue, the minister’s office said.

Representatives of industry body Australian Grape & Wine welcomed the move. “We have maintained our position that Australian producers have not sold wine into the Chinese market or received trade-distorting subsidies,” said Tony Battaglene, Managing Director of Australian Grape & Wine.

China imposed the tariffs for five years in March, formalizing restrictions that had been in place for months. The move follows nearly a full year of trade sanctions imposed by China on Australia, which have affected a range of products from coal and beef to barley and lobster.

Relations have frayed since 2018, when Canberra banned Huawei Technologies Co. from building its 5G network, and went into free fall last year as executives called for an independent investigation into the origins of the coronavirus pandemic. which first appeared in Wuhan city. Australia has already taken action at the WTO on barley tariffs of over 80% that China imposed last year.

Shares of Australian wine producer Treasury Wine Estates (OTC 🙂 Ltd. fell more than 3% in Sydney on Monday.

(Addition of Treasury Wine actions in the last paragraph)

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