Amid Escalating Trade Tensions, China Again Targets Australian Wine

With increasing tensions between Australia and China, regulators in Beijing have put up another hurdle in front of Australian winemakers.

After a complaint from the China Wine Industry Association, an anti-subsidy investigation of some wine imports from Australia has been launched by China’s Ministry of Commerce, the ministry said on Monday.

40 allegations of unfair government subsidies in the Australian wine sector will b investigated by it, the ministry said.

This investigation is the latest signal of the deteriorating relations between the two countries.

Australia among the first few nations to call for a investigation into the origins of the coronavirus pandemic, a move that had upset China. Australia was later targeted by China over trade as Beijing suspended some imports of beef and imposing heavy tariffs on barley imported from Australia.

The sale of a dairy business to a Chinese company was effectively blocked by the Australian government last week as the country’s Treasurer, Josh Frydenberg, said that the takeover “would be contrary to the national interest.”

And in a speech last week in Canberra, second most senior Chinese diplomat in Australia linked the support by Australia of an investigation into the origin of the novel coronavirus pandemic to the betrayal of Julius Caesar by Brutus.

“All of a sudden, they heard this shocking news of a proposal coming from Australia, which is supposed to be a good friend of China,” said Wang Xining, deputy head of mission at the Chinese embassy in Australia. “It is approximately identical to Julius Caesar in his final day when he saw Brutus approaching him. ‘Et tu, Brute?'”

And earlier this month, Australian wine was at the center of a controversy following the announcement from China’s Ministry of Commerce that it would investigate whether Australia was dumping the product into the Chinese market.

Those accusations were dismissed by the Australian government which had said back then that “Australian wine is by no means subsidized and by no means sold at or below market rates in the world market.”

According to Wine Australia, a trade organization backed by the country’s government, in term of value, Australia is the biggest exporter of wine to China. The group said that the country exported 1.13 billion Australian dollars (about $831 million) worth of wine to China in the most recent financial year, which ended September 2019.

But Australia is now pushing back again.

Australian Federal Trade Minister Simon Birmingham said in a statement that the government rejected allegations that “programs that support research and development equate to a subsidy of our wine exports”, said Australian Federal Trade Minister Simon Birmingham said in a statement in response to the latest probe on Monday.

The government will now work with winemakers “to mount the strongest possible case against these claims,” he added.

According to the Chinese Ministry of Commerce, the focus of the Chinese investigation will be on imported wines of less than two liters each and therefore the subsidies investigation will take at least a year.

(Adapted from CNN.com)



Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized

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