World Trade Organization to review Chinese tariffs on Australian wine

The World Trade Organization (WTO) has agreed to review Chinese tariffs on imported Australian wines, amid continuing political and economic tensions.

Australia referred China to the international trade arbitrator earlier this year, arguing that Beijing’s decision to impose tariffs of up to 220% had caused “serious damage” to the wine industry Australian.

The dispute settlement body, which met behind closed doors on Tuesday, accepted Australia’s second request after its first attempt was blocked by China in September.

This is the third time that Australia has requested WTO action on an agricultural product in less than a year, and it follows the federal government’s referral to the WTO on China’s barley tariffs in December 2020.

Australian wine exports to China collapsed following the imposition of tariffs.(ABC Rural: Megan Hughes)

Trade tensions, already difficult after Australia banned Chinese telecommunications giant Huawei from its 5G wireless network in 2018, escalated after Canberra called for an international investigation into the origins of the coronavirus.

China responded by imposing tariffs on Australian wine and barley and restricting imports of Australian beef, coal and grapes, measures described by the United States as “economic coercion.”

In March, Beijing confirmed the tariffs would apply for five years, ending what had been the wine industry‘s most lucrative business.

China defended the move, saying Australian winegrowers were selling wine below the cost of production and it had been subsidized.

Australian wine exports to China have fallen since the tariffs were introduced last November.

In the six months to June of this year, Australia exported just $ 13 million worth of wine to China, up from $ 490 million in the same period last year.

A WTO logo next to a red light.
WTO panels typically deliberate for six months before ruling on trade disputes.(Reuters: Denis Balibouse)

China to “vigorously defend” tariffs

Explaining his decision to request a WTO investigation, the delegate of Australia expressed his disappointment that China had not taken concrete steps to address its concerns, according to a summary of the meeting published by the WTO.

Australia remained open to further discussions with China to resolve the issues, he added.

“China regrets Australia’s decision to act on its request for the establishment of a panel in the dispute,” the Chinese delegate said in a statement.

“China will vigorously defend its legitimate measures in subsequent proceedings and is confident that its challenged measures comply with the relevant WTO rules.”

WTO panels generally deliberate for six months before preparing a ruling. The parties can then appeal against the result.

ABC / Reuters

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