Australia Eyes Second WTO Action Against China, This Time for Wine

An employee of Pernod Ricard China, distributors of Jacob's Creek Wines in China, attends a winetasting session at Jacob's Creek Winery in South Australia's Barossa Valley on July 20, 2010. Greg Wood/AFP via Getty Images

Australia’s trade minister is considering whether to launch a second action against China at the World Trade Organisation (WTO), this time to fight tariffs imposed on wine exports.

It follows an ongoing WTO action over barley tariffs that was launched late last year by Australia.

“One of the things we are very keen to do is to make sure with our trade disputes with China, is that we are using every means we can to deal with them,” Trade Minister Dan Tehan told Sky News’ Sunday Agenda program on Sunday.

“Obviously, the WTO is one of those mechanisms. We are using that when it comes to barley, and we are under very deep consideration now when it comes to wine, as to whether we will also refer that,” he added.

Tehan is about to embark on a trip to Europe, which will include a meeting with the WTO director-general in Geneva.

He is also due to meet with other leaders to push against trade “protectionism.” The European Union and the United Kingdom are backing the introduction of “carbon tariffs” against countries with “less stringent” environmental laws.

Tehan’s comments on WTO action come just weeks after Beijing’s Ministry of Commerce (MOFCOM) pulled the trigger and decided to slap tariffs, worth 116 to 218 percent, on Australian wine exports to China.

Australian wine (2nd R) is displayed amongst other wines at a shop in Beijing on December 23, 2020. (Noel Celis/AFP) via Getty Images)

In August 2020, MOFCOM launched an investigation into supposed “dumping” practices by Australian wine companies, claiming they were selling products at below-the-market prices to drown out local producers.

This claim was rebuffed by Australian Prime Minister Scott Morrison, who pointed out that Australian wines had the second-highest average price in China after New Zealand wine.

The tariffs come as one part of a long-running economic coercion campaign against Australian exports to China, which has affected coal, beef, wine, barley, lobster, timber, lamb, and cotton industries, and were imposed following Foreign Minister Marise Payne’s calls for an investigation into the origins of COVID-19 in April 2020.

Meanwhile, Australia’s ongoing barley dispute with China was elevated to the second phase in March, where a panel will be convened to hear arguments from both parties.

Australia is fighting to have tariffs worth around 80 percent removed from exports to China. MOFCOM imposed this tariff following another earlier investigation into “dumping” by barley exporters.

However, there are concerns that WTO action could stall, given the Appellate Body responsible for hearing final appeals has been in limbo since 2019.

The Trump administration decided against appointing new members to the Body over a host of issues with the WTO, including judicial overreach by its members, consistent rulings against U.S. tariffs designed to protect American businesses, and slow decision-making.

Professor Peter Draper, executive director at the Institute for International Trade at the University of South Australia, previously told The Epoch Times that, “I think you’d have to go back to what Australia’s motivations and bringing this case are, and I think the fundamental motivation is to highlight the importance of the rule of law procedures, international rule of law procedures.”

“Where better to do this than in the apex global trade body the WTO? In other words, the signals that China sends in how it responds will be watched by the entire membership.”