Australia is to take China before the WTO over Beijing’s imposition of crippling tariffs on Australian wine exports, it announced yesterday, in the latest sign of worsening tensions between the two countries.
The decision “to defend Australia’s winemakers” comes six months after Australia lodged a separate protest at the WTO over tariffs on Australian barley and is in line with the government’s “support for the rules-based trading system,” it said in a statement.
However, it added that “Australia remains open to engaging directly with China to resolve this issue.”
It is the latest incident in an escalating tussle between Australia and its largest trading partner, and follows warnings by Australian Prime Minister Scott Morrison that his government would respond forcefully to countries trying to use “economic coercion” against it.
China in November last year slapped tariffs of up to 218 percent on Australian wines, which it said were being “dumped” on the Chinese market at subsidized prices.
The crackdown virtually closed what had been Australia’s biggest overseas wine market, with sales falling from A$1.1 billion (US$822.9 million) to just A$20 million, official figures showed.
“The actions taken by the Chinese government have caused serious harm to the Australian wine industry,” Australian Minister for Trade, Tourism and Investment Tehan told a news conference announcing the decision to lodge a formal dispute with the WTO.
“We would love to be able to sit down and be able to resolve these disputes” directly with the Chinese, he said.
However, lower-level official contacts had failed to make progress, he added.
“We will use every other mechanism to try and resolve this dispute and other disputes that we have with the Chinese government,” he said.
Tehan said the dispute process within the WTO was difficult and estimated that it would take two to four years to resolve the matter.
Beijing has imposed tough economic sanctions on a range of Australian products in the past few months, ranging from high tariffs to disruptive practices across several agricultural sectors, coal, wine and tourism.
The measures are widely seen in Australia as punishment for pushing back against Beijing’s operations to impose influence in Australia, rejecting Chinese investment in sensitive areas and publicly calling for an investigation into the origins of the COVID-19 pandemic.
Yesterday’s move came just a week after a G7 summit echoed Australia’s call for a tougher stand against China’s trade practices and its more assertive stance globally.
The G7 summit ended on Saturday last week with the announcement of US-led plans to counter China’s Belt and Road Initiative, the hallmark of its efforts to extend economic influence around the world.
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