Australia Takes China’s Wine Tariffs to WTO as Ties Sour

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

The decision to file for the dispute resolution process was taken following extensive consultation with Australia’s wine makers who have collectively seen exports drop from A$1.1 billion ($823 million) to about A$20 million under a regime that puts tariffs as high as 218%, Dan Tehan said in a statement.

The move is the first formal step over wine in a deepening row that’s led to frosty relations between Canberra and its biggest export-trading partner. The top commodities buyer said in March that Australian wine had been subsidized and sold under market value, a view that’s been rejected by the Australian government. The decision comes after Tehan told Bloomberg Television on Wednesday the government would be “making a decision very shortly.”

“Australia’s use of the WTO in this matter 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 engaging directly with China to resolve this issue, the minister’s office said.

Representatives for industry body Australian Grape & Wine welcomed the move. “We have been consistent in our position that Australian producers have not dumped wine on the Chinese market, nor received trade-distorting subsidies,” said Tony Battaglene, chief executive of Australian Grape & Wine.

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China imposed the tariffs for five years in March, formalizing curbs that had been in place for months. The move followed almost a full year of trade sanctions volleyed by China at Australia that hit a range of commodities from coal and beef to barley and lobster.

Relations have frayed since 2018, when Canberra barred Huawei Technologies Co. from building its 5G network, and went into freefall last year as leaders called for an independent probe into the origins of the coronavirus pandemic that first emerged in Wuhan city. Australia has already taken action at the WTO over barley tariffs of more than 80% that China imposed last year.

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

(Adds Treasury Wine shares in final paragraph)

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