Australia’s trade minister has rejected the Chinese regime’s claims that Australian winemakers are dumping wine into the Chinese market. He also denied that the threat of tariffs on wine is part of a trade war.
China’s Ministry of Commerce will launch an investigation and is considering placing countervailing duties, or tariffs, on Australian wines.
Speaking at a press conference on Aug. 18 Australia’s Federal Trade Minister Simon Birmingham said that the government found the allegations “deeply troubling and quite perplexing.”
“Australian wine is by no means subsidised, it is by no means sold at or below anything other than market rates in the world market,” said Birmingham.
The investigation is expected to take between 12-18 months according to a media statement released on Aug. 18 by the Chinese Ministry of Commerce.
A spokesperson for the peak body of the Australian wine industry, Australian Grape and Wine, told The Epoch Times on Aug. 19 that they would “work closely” with producers, the Australian government, and the Chinese regime.
“Our producers have a long and positive relationship with Chinese customers, and it is a strong and high-value market for Australian wine. We hope to continue and build on this relationship in the future,” the spokesperson said.
The Australian wine industry exports an estimated $1.1 billion worth of wine to China every year, making it the largest export market for Australian winemakers.
Dumping, according to the Australian government, is when an exported product is sold in another country at a price below that charged in the land of production, or below the manufacturing cost.
A product can also be considered “dumped” if an exporter profits from government assistance, thereby allowing the exporter to sell the goods at a lower price.
According to Birmingham the Chinese government had cited government programs like those designed to help recover water and restore environmental flows in the Murray River or programs that support research and development across the wine industry as “subsidies for Australian wine exporters.”
Trade Minister Denies Australia-China Trade War
Birmingham denied this is another volley in a burgeoning trade war that China is launching against Australia.
“Well, Australia is certainly not engaging in any type of war. What we want is a constructive trading relationship, one where we can work together in the areas of mutual interest,” he said in response to a reporter.
There are concerns that the Chinese regime’s decision could end with tariffs on Australian wines similar to the tariffs placed on Australian barley exports in May.
Birmingham acknowledged this concern. “I can understand why people would be concerned given the experiences the Australian barley industry has had,” he told reporters.
“All we can do at this time is to support our winemakers, hundreds of them across Australia in terms of making the strongest possible case in their defence to Chinese authorities. That’s what we’ll be doing. It will be based on evidence and fact, and we are confident that it will be a compelling one,” said Birmingham.
A report by the Department of Agriculture noted that China’s barley tariff had effectively made Australian barley uncompetitive in the Chinese market causing an estimated loss of up to $750 million.