Dumping first without repentance, then suing the WTO and shifting the blame.
On October 26, 2021, the WTO stated that it had agreed to establish a panel to specifically review China's measures imposing tariffs on imported Australian wine.
Case review
In July 2020, the China Alcoholic Drinks Association, on behalf of the domestic wine industry, formally submitted an anti-dumping investigation application to the Ministry of Commerce.
On August 18, the Ministry of Commerce issued an announcement, initiating an anti-dumping investigation into imported wines originating from Australia in accordance with the law. This investigation should normally be concluded by August 18, 2021, and may be extended to February 18, 2022 under special circumstances.
After investigation, the Ministry of Commerce ruled in accordance with the law to adopt corresponding trade remedy measures. The ruling report indicates that there is dumping of wines imported from Australia, causing substantial damage to China's domestic industry, and the adoption of anti-dumping measures complies with WTO rules and relevant provisions of China's domestic laws.
On March 26, 2021, the Ministry of Commerce issued an announcement, publishing the final ruling on the anti-dumping and anti-subsidy investigation of relevant wines originating from Australia, deciding to impose anti-dumping duties on relevant wines originating from Australia from March 28, 2021, with anti-dumping duty rates ranging from 116.2% to 218.4% for various companies. Australia, dissatisfied, filed a review application with the WTO.
In response, China's representative to the WTO stated, "China regrets Australia's decision to further request the WTO to establish a panel to resolve the dispute." The Chinese representative emphasized that China will actively defend its legitimate measures in the subsequent proceedings and believes that the measures comply with relevant WTO rules.
On October 27, the Australian Broadcasting Corporation (ABC) reported that the Australian government stated that Beijing's imposition of tariffs of up to 220% on wines originating from Australia would "cause serious damage to the Australian wine industry."
The Anti-Dumping Regulations of the People's Republic of China
Article 3: Dumping refers to the act, in the normal course of trade, of an imported product entering the market of the People's Republic of China at an export price lower than its normal value.
Article 37: If a final determination establishes that dumping has occurred and caused injury to a domestic industry, an anti-dumping duty may be imposed. The imposition of an anti-dumping duty shall be in the public interest.
Article 38: The imposition of an anti-dumping duty shall be proposed by the Ministry of Commerce, with a decision made by the Customs Tariff Commission of the State Council based on the Ministry's proposal, and announced by the Ministry of Commerce. The customs shall implement it from the date specified in the announcement.
[1] The author's perspective
As shown in these two charts, with the continuous and substantial increase in import volume, the market share of Australian wine in China has been on a rising trend. However, contrary to the sustained surge in import volume, its import price has generally been declining. This form of dumping has severely squeezed the market space of China's wine industry, leading to a sharp deterioration in production and business conditions.
However, the imposition of anti-dumping duties not only helps maintain a fair trade order but also protects the safety and healthy development of the domestic wine industry. At the same time, anti-dumping measures are in the public interest, as they further leverage the characteristic of China's wine industry integrating primary, secondary, and tertiary industries, promoting economic and agricultural development in major production areas such as Gansu, Ningxia, and Xinjiang. This will have positive implications for the effective use of land resources, improvement of rural ecological environments, increase in farmers' income, and maintenance of social stability in border ethnic regions.
Looking back at Australia, the country relies heavily on China in multiple areas. Yet, despite this, the Morrison government still chose to provoke China. The deterioration of Sino-Australian relations has impacted trade cooperation, causing a sharp decline in sales of Australian wine, which depends on the Chinese market. Now, due to the anti-dumping duties, Australia has directly filed a complaint with the WTO. Although the outcome remains uncertain, Australian wine has ultimately lost public favor and the Chinese market.
