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Australia and China set for wine tariff tussle at WTO

Australia has complained to the World Trade Organisation as it seeks to overturn damaging tariffs of up to 218% on wines arriving in China.

Exports of Australian wine to China have slumped since the import tariffs were first introduced, and Australia’s government has now formally complained to the World Trade Organisation (WTO).

Australia has requested dispute consultations with China over the country’s new import levies on Australian bottled wines, the WTO said this week.

The move allows both sides to seek a solution with the WTO acting as referee, but Australia’s formal complaint also marks an escalation in the dispute.

China confirmed tariffs ranging from 116% to 218% on Australian wine imports in containers of two litres or less back in March, following an anti-dumping investigation by its commerce ministry.

Yet it imposed the tariffs on a provisional basis towards the end of 2020, prompting an immediate drop-off in shipments of Australian wines to China – a key market for many Australian wineries.

‘Tariffs of 116 to 218% mean that it’s basically impossible for Australian wine to be competitive in the Chinese market,’ said Australia’s trade minister, Dan Tehan, in March this year.

In its WTO complaint, Australia said China’s wine tariffs breach of WTO anti-dumping rules.

It also said China ‘failed’ to properly assess the evidence before deciding to impose the levies.

Tehan said his government ‘will continue to vigorously defend the interests of Australian wine makers using the established system in the WTO to resolve our differences’.

Asking for WTO dispute consultations effectively gives both sides 60 days to discuss and resolve their differences. If there’s no agreement, Australia could then ask for a WTO panel to judge the case.

Trade relations between Australia and China have soured more generally, but Tehan said Australia remained ‘open to engaging directly with China’ to end the wine tariff dispute.

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