China claims that the duties were raised as a result of unfair tradepractices, which Australia rejects. Australia says it is still willing to talkto China directly about the problem. Australia's largest market for wine exports is China, and winemakers claim the price increases have affected them hard. The Australian government stated in a statement that the decision totake the matter to the WTO came after considerable consultation withwinemakers. "The government will continue to actively defend the interests of Australian winemakers by resolving our concerns within the established WTO system," said Dan Tehan, minister for trade, tourism, and investment.
Even though there is "no quick cure," Tony Battaglene, CEOof Australia's national organization of grape and wine producers, told the BBCthat taking the subject to the WTO was the correct way to try to settle the situation. "The fundamental thing about a WTO action is that you really enter into a dialogue with the other country - in this case China - so it does enable governments to start talking about [the issue] and that brings the prospect of resolution," he said.
China accuses Australia of dumping, a trade practice that isprohibited under international trade law. Dumping occurs when a country sells aproduct to another country at a lower price than it would ordinarily charge in its own market. The goal could be to expand market share and drive out competition in the foreign country.
Although the two countries are significant commercial partners,their diplomatic relations have deteriorated since Australia called for aninternational investigation into Covid-19's origins. Scott Morrison, Australia's prime minister, has stated repeatedly that his administration will not submit to economic pressure.
China imposed duties on Australian wine at the end of last year,stating that they will be in effect for five years. It came after months ofother penalties against Australian exports like barley, meat, and coal. According to industry estimates, Australian winemakers transported just A$12 million ($9 million; £6.5 million) of wine to China in the four months between December 2020 and March 2021.
They had exported A$325 million worth of wine to China in the sameperiod a year before. Wine is the latest Australian export to suffer as aresult of the bigger political conflict this year. Since May, China's Ministry of Commerce has banned or sanctioned a number of products, including barley, beef, copper, sugar, lobsters, lumber, and coal.
While Beijing claims the blockages are due to trade issues, accusingAustralia of illicit wine dumping, observers believe it's becoming increasinglyevident that the true cause is political. This has prompted lawmakers all across the world to release a video this week pushing people to buy Australian wine in order to "stand up to China's bullying."
The newly created Inter-Parliamentary Alliance of China - a group of200 MPs from 19 countries known for their hawkish attitudes on China - launchedthe #SolidarityWithAustralia campaign. Kimberley Kitching, an Australian senator, claims in the video that China has halted Australia's exports due to human rights criticism. "This isn't just a smear campaign against Australia. This is an attack on all free countries around the world "she explains.