Australia (Commonwealth)_China’s recent offer to negotiate the removal of tariffs on Australian wine imports, coinciding with Prime Minister Anthony Albanese’s visit, may appear generous at first glance. However, a deeper examination reveals a more intricate reality. Simon Birmingham, former trade minister, asserts that these tariffs were an unjust attempt at economic coercion, violating both WTO rules and the China-Australia Free Trade Agreement (CHAFTA).
The imposition of anti-dumping duties by China, justified under WTO regulations, further complicates the matter. Dumping, a common commercial practice of selling products below domestic prices in foreign markets, does not inherently breach trade rules. However, if it causes significant harm to local producers, anti-dumping duties may be legally imposed. Chinese authorities claimed that Australian wine was both dumped and detrimental to their own industry, leading to the imposition of duties ranging from 116.2% to 218.4% of import prices.
Australia, disputing these measures, sought a WTO panel in September 2021 to assess the legality of the duties. Their 394-page submission pinpointed 47 inconsistencies in China’s anti-dumping measures under WTO regulations, unequivocally labeling China’s decision as “absurd” and flawed.
The WTO panel recently completed its work, and its findings were shared exclusively with Australia and China. Albanese announced a suspension of the WTO dispute, pending an “expedited review” by Beijing over the next five months. If no resolution is reached, Australia is prepared to revive the dispute.
The underlying motive behind China’s coercive tactics lies in the widely held belief that these duties stem from Australia’s call for an inquiry into the origins of COVID-19. Additionally, historical use of anti-dumping measures by Australia against Chinese goods and investigations may have influenced China’s choice of this particular retaliatory measure. As this complex dispute unfolds, it underscores the importance of separating political considerations from trade policy decisions. In an increasingly uncertain global landscape, trading partners must navigate these complexities with clarity and integrity. Ultimately, while the removal of anti-dumping duties is a positive development, the primary casualties in this dispute remain the Australian wine exporters, underscoring the need for vigilant trade policies in an evolving world.
