Australia makes ‘no apologies’ and may take China to WTO over its massive wine tariffs 

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Australia will refuse to kowtow to Beijing on its national interest no matter how many salvos China fires in the worsening trade war.

The authoritarian regime is angry at Australia’s rules limiting foreign ownership, banning tech giant Huawei from a 5G network, and demands for a coronavirus investigation.

Inflammatory rhetoric in state-owned press, enormous tariffs slapped on Australian goods, and some imports being banned altogether are some of the punitive retaliations inflicted by China. 

However, Federal Treasurer Josh Frydenberg said on Sunday that Australia made ‘no apologies’ for defending the national interest, despite predatory trade practices.

Enormous tariffs slapped on Australian goods like barley (pictured), and some imports being banned altogether are some of the punitive retaliations inflicted by China.

Trade Minister Simon Birmingham

Trade Minister Simon Birmingham

Prime Minister Scott Morrison

Prime Minister Scott Morrison

Trade Minister Simon Birmingham (left) said Australia was willing to take China to the WTO. Prime Minister Scott Morrison (right) said Australia is looking for new markets to sell to

‘We will continue to make our case to the Chinese government about the importance of this two-way trading relationship and we are always ready to engage in a respectful and mutually beneficial dialogue,’ he said.

‘But where Australia’s national interest needs to be defended, we will and we make no apologies for various actions that we have taken on a number of fronts including having a foreign investment framework that ensures the national interest is protected.’  

Australia may take China to the World Trade Organisation over the raft of trade disputes after Beijing slapped a 212 per cent tariff on Australian wine producers. 

Trade Minister Simon Birmingham flagged Canberra’s willingness to pursue China at the WTO on ABC’s Insiders on Sunday morning.

He said Australia outlined a number of grievances over China’s recent trade decisions to the WTO’s trading goods committee last week.

‘We do see those as a very concerning development. We are calling them out through the WTO, while also still using all of those processes in the Chinese system to try to resolve them,’ he said.

‘But ultimately, these are Chinese decisions, China has chosen to apply them on Australia, and only China can choose to reverse them.’

An Australian coal flotilla trapped off the coast of China has swelled to 82 ships and is carrying $1.1 billion in cargo, unable to dock. Pictured: file image of tankers waiting to unload cargo

An Australian coal flotilla trapped off the coast of China has swelled to 82 ships and is carrying $1.1 billion in cargo, unable to dock. Pictured: file image of tankers waiting to unload cargo

An Australian coal flotilla trapped off the coast of China has swelled to 82 ships and is carrying $1.1 billion in cargo, unable to dock. Pictured: file image of tankers waiting to unload cargo

Australia’s $1.2 billion wine export industry to China has been gut-punched by a 212 per cent tariff after Beijing claimed producers were ‘dumping’ or selling at below cost for market share 

Australia is also seeking new trade deals with Britain and the European Union to diversify away from dependence on China’s unpredictable and authoritarian Communist Party system.  

Beijing has imposed increasingly punitive tariffs on a growing list of Australian exports including coal, timber, copper, beef, meat, lobsters and barley.

China’s simmering anger was inflamed in 2018 when Australia banned Chinese tech giant Huawei from Australia’s 5G rollout on security grounds.

Australia also snubbed Huawei by laying the undersea cables for high-speed internet for Pacific Island nations including the Solomon Islands and Papua New Guinea.

The Coral Sea Cable links Sydney to its Pacific Island neighbours, and Canberra said at the time it couldn’t take the risk of a potential backdoor for the Chinese government to spy on the West.  

The diplomatic attacks escalated after Canberra called for an investigation into the origins of the coronavirus pandemic – which began in Wuhan.

In June, Prime Minister Scott Morrison outlined a tough new national security test for foreign takeovers that further enraged Beijing.

The new powers would force foreign companies to sell their assets if they pose a national security threat.

Australian coal exports to China have dropped 96 per cent in the first three weeks of November as 82 ships laden with 8.8 million tonnes of coal are left floating off Chinese ports where they have been denied entry.

More than 50 have been waiting idle for more than a month, drastically inflating their shipping costs.

In the latest attack on November 28, Beijing imposed a 212 per cent tariff on Australia’s $1.2 billion wine exports, claiming they were being ‘dumped’ – which means selling at below-cost in order to gain market share.

Coal exports to China from Australia have dropped 96 per cent in the first three weeks of November with 82 export ships denied entry to Chinese ports, some for more than a month

Coal exports to China from Australia have dropped 96 per cent in the first three weeks of November with 82 export ships denied entry to Chinese ports, some for more than a month

Coal exports to China from Australia have dropped 96 per cent in the first three weeks of November with 82 export ships denied entry to Chinese ports, some for more than a month

Both Australia’s wine producers and Chinese importers reject the claim outright, but China has announced an 18-month anti-dumping probe, which will delay any referral to the WTO, Trade Minister Birmingham said.

‘We still have parts of that Chinese process that we have to work through before we get to the point of a WTO dispute (on wine),’ Mr Birmingham said. 

Canberra’s complaint to the WTO over China’s massive 80 per cent tariffs on Australian barley exports in May this year is, however, imminent, having already been disappointed by the Chinese appeals process.

The tariff comprises a dumping margin of up to 73.6 per cent, and a subsidy margin of up to 6.9 per cent.

Australia has been trying to resolve the issue through Beijing’s internal dispute resolution mechanisms to no avail, and is now on the brink of going to the WTO.

Mr Birmingham said Australia had sought to engage with China’s domestic processes ‘in good faith’ but Beijing had rejected all the evidence  – so an appeal to the WTO was the next step.  

‘I expect that will be the outcome,’ he said. 

Barley producers have estimated the tariffs will cost them $2.5 billion in lost revenue by 2025.

All the major barley industry lobby groups called for WTO action in May when the tariff was first imposed.  

The bitter diplomatic feud between Australian and China continues (pictured, Chinese President Xi Jinping)

The bitter diplomatic feud between Australian and China continues (pictured, Chinese President Xi Jinping)

Chinese President Xi Jinping pictured in October. China has increased trade penalties on Australia after Canberra asked for an investigation into the origins of the covid-19 pandemic

In a joint statement, the Grains Industry Market Access Forum, Australian Grain Exporters Council, GrainGrowers, Grain Producers Australia and Grain Trade Australia said the tariffs would severely disrupt Australia’s barley exports to China.

 ‘We call on the Australian Government to … immediately pursue the WTO Dispute Settlement process to the fullest extent possible,’ they said on May 19.

Some in the industry are now reportedly undecided on whether to go to the WTO after all.

The dispute resolution process may take years to resolve, they are uncertain by how much they would be compensated, and they fear greater retaliation by Beijing in the meantime.

Mr Birmingham said he was discussing the move to the WTO with industry representatives. 

Opposition trade spokesman Jason Clare turned the blame onto the Morrison Government.

‘This is the sort of thing that should be able to be sorted out over the phone or face-to-face,’ he said.

‘That’s what Bob Hawke would have done. That’s what John Howard would do and that’s what Scott Morrison should do.’

Chinese troops take part in marching drills ahead of an October 1 military parade to celebrate the 70th anniversary of the founding of the People's Republic of China

Chinese troops take part in marching drills ahead of an October 1 military parade to celebrate the 70th anniversary of the founding of the People's Republic of China

Chinese troops take part in marching drills ahead of an October 1 military parade to celebrate the 70th anniversary of the founding of the People’s Republic of China

China has issued an ever-increasing raft of adverse trade decisions against Austalian exporters ever since Australia asked for an international investigation into the origins of the coronavirus pandemic, which began in Wuhan close to a BSL-4 laboratory that had been conducting gain-of-function research on bat coronaviruses.

Prime Minister Scott Morrison told ABC Radio that some things were out of Australia’s control but that the amount of trade covered by international agreements had been expanded from 26 per cent to 70 per cent in the last few years to give protection.

‘I mean, you can’t control everything in this world but one thing you can control is who you are and your values and the things that you know are important and it’s important to remain steadfast with that,’ he said.

‘We’ll do everything we can … to ensure that we can try and address these trade issues that have come up with China, the technicality issues that they’ve raised. But obviously we’re very concerned about that.

Mr Morrison said the government would look to see how they can get the hardest hit producers through ‘this difficult time’, and was actively seeking new markets.

‘We have been working very hard on expanding trade opportunities,’ he said. 

How China’s feud with Australia has escalated

2019: Australian intelligence services conclude that China was responsible for a cyber-attack on Australia’s parliament and three largest political parties in the run-up to a May election.

April 2020: Australian PM Scott Morrison begins canvassing his fellow world leaders for an inquiry into the origins of the coronavirus pandemic. Britain and France are initially reluctant but more than 100 countries eventually back an investigation. 

April 15: Morrison is one of the few leaders to voice sympathy with Donald Trump’s criticisms of the World Health Organization, which the US president accuses of bias towards China. 

April 21: China’s embassy accuses Australian foreign minister Peter Dutton of ‘ignorance and bigotry’ and ‘parroting what those Americans have asserted’ after he called for China to be more transparent about the outbreak.  

April 23: Australia’s agriculture minister David Littleproud calls for G20 nations to campaign against the ‘wet markets’ which are common in China and linked to the earliest coronavirus cases.  

April 26: Chinese ambassador Cheng Jingye hints at a boycott of Australian wine and beef and says tourists and students might avoid Australia ‘while it’s not so friendly to China’. Canberra dismisses the threat and warns Beijing against ‘economic coercion’. 

May 11: China suspends beef imports from four of Australia’s largest meat processors. These account for more than a third of Australia’s $1.1billion beef exports to China. 

May 18: The World Health Organization backs a partial investigation into the pandemic, but China says it is a ‘joke’ for Australia to claim credit. The same day, China imposes an 80 per cent tariff on Australian barley. Australia says it may challenge this at the WTO. 

May 21: China announces new rules for iron ore imports which could allow Australian imports – usually worth $41billion per year – to be singled out for extra bureaucratic checks. 

June 5: Beijing warns tourists against travelling to Australia, alleging racism and violence against the Chinese in connection with Covid-19.  

June 9: China’s Ministry of Education warns students to think carefully about studying in Australia, similarly citing alleged racist incidents.   

June 19: Australia says it is under cyber-attack from a foreign state which government sources say is believed to be China. The attack has been targeting industry, schools, hospitals and government officials, Morrison says.

July 9: Australia suspends extradition treaty with Hong Kong and offers to extend the visas of 10,000 Hong Kongers who are already in Australia over China’s national security law which effectively bans protest.

August 18: China launches 12-month anti-dumping investigation into wines imported from Australia in a major threat to the $6billion industry. 

August 26: Prime Minster Scott Morrison announces he will legislate to stop states and territories signing deals with foreign powers that go against Australia’s foreign policy. Analysts said it is aimed at China.

October 13: Trade Minister Simon Birmingham says he’s investigating reports that Chinese customs officials have informally told state-owned steelmakers and power plants to stop Aussie coal, leaving it in ships off-shore.

November 2: Agriculture Minister David Littleproud reveals China is holding up Aussie lobster imports by checking them for minerals.

November 3: Barley, sugar, red wine, logs, coal, lobster and copper imports from Australia unofficially banned under a directive from the government, according to reports.

November 18: China releases bizarre dossier of 14 grievances with Australia. 

November 27: Australian coal exports to China have dropped 96 per cent in the first three weeks of November as 82 ships laden with 8.8million tonnes of coal are left floating off Chinese ports where they have been denied entry. 

November 28: Beijing imposed a 212 per cent tariff on Australia’s $1.2 billion wine exports, claiming they were being ‘dumped’ or sold at below-cost. The claim is denied by both Australia and Chinese importers. 

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