Australia Loses Trade Dispute With CCP Over Steel Products

A worker pushes a cart of steel rims at a factory in Hangzhou, China, on Feb. 18, 2024. STR/AFP via Getty Images

Australia has lost a trade dispute with Beijing over steel products following a ruling by the World Trade Organisation (WTO).

The Chinese Communist Party (CCP) filed a complaint to the WTO in June 2021, asserting that Australia’s anti-dumping measures on its cheap wind towers, deep-drawn stainless steel sinks, and railway wheels were unfair.

This complaint was launched after the CCP imposed trade restrictions on $20 billion (US$13 billion) of Australian export commodities during a diplomatic fallout between the two countries.

Despite the dispute, Australia continued to trade with China and imported $62 million worth of those steel products in 2022.

On March 27, a WTO panel ruled that the additional duties imposed by the Australian government on the steel products were flawed.

The panel found that Australia’s Anti-Dumping Commission had acted inconsistently with some articles of the anti-dumping agreement when implementing the extra taxes.

Following the panel’s decision, Trade Minister Don Farrell said the Labor government accepted the WTO ruling as it supported the rules-based trading system.

“Australia will engage with China and take steps to implement the panel’s findings,” he said.

However, the minister said the ruling did not undermine the integrity of Australia’s trade defence instrument system.

“Our system is evidence-based and non-discriminatory and will continue to respond effectively to unfair trade practices,” he said.

“Australia remains committed to a fully-functioning WTO dispute settlement system so that the rights and obligations of all WTO members can be enforced.”

Mr. Farrell’s statement was a step down from the response of former Trade Minister Dan Tehan, who said Australia would vigorously defend its trade system from CCP’s trade practices.

Currently, Australia imposes anti-dumping tariffs on many Chinese steel products to protect domestic producers from a flood of cheap imports from China.

In 2016, the Australian government announced extra import duties of between 11.7 percent and 57 percent on Chinese-made steel reinforcing bars and rod-in coils, after steel and mining company Arrium went into administration.

The WTO ruling comes as the Labor government seeks to have the CCP drop the remaining sanctions on $2 billion worth of wine, lobster, and beef after Beijing removed trade restrictions on many Australian export products in 2023.

Additionally, the government has suspended a WTO dispute against Beijing over sanctions on Australian wine in exchange for the CCP’s promise to review the punitive tariffs.

However, Labor said it would resume the dispute if the CCP fails to conclude the review by March 31.