Asia Economy

Australia weighs taking China to the WTO again — this time for a dispute over wine

Key Points
  • China's commerce ministry in March announced anti-dumping tariffs between 116.2% and 218.4% on Australian wine imports, measures that are set to last for five years.
  • China is the top destination for Australian wine exports.
  • Both the Australian government as well as Australian Grape and Wine — the national association of grape and wine producers in the country — have repeatedly denied Beijing's dumping allegations.
Photo taken on Dec. 5, 2020 shows the wine made of cherry in the town of Young in Australia. The town of Young is dubbed the "Cherry Capital of Australia".
Chu Chen | Xinhua News Agency | Getty Images

Australia is considering whether it should get the World Trade Organization involved in an ongoing dispute with China, Trade Minister Dan Tehan told CNBC on Wednesday.

China's commerce ministry in March announced anti-dumping tariffs between 116.2% and 218.4% on Australian wine imports — measures that are set to last for five years. Last year, it launched an anti-dumping probe into wine imports from Down Under and introduced preliminary duties.

Separately, China levied additional temporary tariffs of around 6.3% to 6.4% in December, following a different probe into Australian wine subsidy schemes.

"We have worked very closely with the Australian wine industry to understand the injury that has been caused by the actions that China's taken," Tehan, who is also the minister for tourism and investment, said on CNBC's "Squawk Box Asia."

"We'll be making an announcement on whether we will go to the WTO with regards to wine in the coming weeks," he said.

I've written to my Chinese counterpart ... my hope is that we can sit down and work through these issues. Dialogue is the best way to resolve issues.
Dan Tehan
Australia Minister for Trade, Tourism and Investment

Both the Australian government as well as Australian Grape and Wine — the national association of grape and wine producers in the country — have repeatedly denied Beijing's dumping allegations.

They have previously stated that China is the "highest price-point market" for Australian wines, where exporters make more money in terms of dollar per liter value than anywhere else. China is the top destination for Australian wine exports.

Australia is one of the few developed countries in the world that exports more than it imports to China. Relations between Canberra and Beijing soured last year after Australia supported a call for an international inquiry into China's handling of the coronavirus pandemic.

China imposed a range of measures against Australia's exports to the country, including an 80.5% anti-dumping and anti-subsidy duties on Australian barley. Canberra asked the World Trade Organization to mediate and on May 28, the international trade body announced a dispute settlement panel to tackle the issue.

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Tehan reiterated Australia's call to engage in dialogue with China to resolve pending issues — something that other Australian officials have echoed in the past.

"I've written to my Chinese counterpart," he said, explaining that Canberra wants a constructive relationship with Beijing. "So far, I haven't had a response to that correspondence, but my hope is that we can sit down and work through these issues. Dialogue is the best way to resolve issues."

Meanwhile, Tehan said Australia is looking at ways to find new markets for its products. It is currently negotiating a free trade agreement with the United Kingdom and the European Union.

"We are always looking as well at other opportunities that we can pursue, whether it be through our existing trading partners or by opening up new avenues to be able to explore," he added.