China stokes tensions with fresh probe into Australian wine

Beijing said on Monday, August 31, it had launched another probe into Australian wine imports, accusing Canberra of using subsidies to give firms “an edge” over local rivals, in the latest salvo as trade and diplomatic relations between the two deteriorate.

Tensions have been ramped up between the countries in recent months after Australian Prime Minister Scott Morrison joined US calls for an independent inquiry into the coronavirus pandemic, which was first detected in the Chinese city of Wuhan last year.

China’s wine industry lobby has complained Australia offered different subsidy programs that give its wines an advantage over Chinese products, the commerce ministry said in a statement.

It added that the application by the wine lobby group said “there are a total of 40 subsidy programs that may offer an edge to the Australian wine industry.”

The probe will look into subsidies received by Australian winemakers throughout 2019 and could lead to countervailing duties on imports, it said.

Beijing has already conducted preliminary discussions with Canberra on the inquiry, according to the statement.

In response, Australian Trade Minister Simon Birmingham said “we strongly refute claims” that government programs supporting research and development amounted to a subsidy of the country’s wine exports.  

“The government will work with our internationally-renowned wine industry to mount the strongest possible case against these claims,” he said in a statement.

The news comes two weeks after the ministry of commerce said it would investigate dumping – when a country sells goods in a country for less than it costs at home – throughout 2019.

Wine exports to China hit a record A$1.25 billion (US$900 million) last year, according to Australian government data, making it the biggest market by value for the product.

China – Australia’s biggest trade partner – has threatened economic blowback on a range of Australian goods since Canberra called for the virus inquiry.

In May, China suspended imports of beef from 4 Australian slaughterhouses and imposed 80% tariffs on Australian barley imports.

Beijing has also warned people not to visit Australia for study or tourism, alleging anti-Asian racism in the wake of the pandemic. – Rappler.com