Australian wine hit with new strike as offset for ‘subsidies’

China has hit Australian winemakers with another trade strike, arguing the Australian government has unfairly subsidised local vineyards.

The countervailing duty, announced on Thursday, will see another 6.3 per cent added to tariffs of between 107 per cent and 212 per cent already in force. It all but extinguishes local producers' access to the world's largest market.

It is the latest impost on Australian products this year after several diplomatic altercations over the origins of the coronavirus pandemic, national security measures, human rights and foreign interference legislation. Australian timber and lamb exporters had further restrictions placed on them on Wednesday, following strikes on coal, barley and beef.

China has put another duty on Australian wine. Credit:

Unlike the November tariffs, which were imposed based on a claim that Australian companies were dumping wine in the Chinese market at discount prices to undermine homegrown competition, Thursday's duty targets government subsidies for Australian winemakers.

The duty follows a three-month investigation by the Chinese Ministry of Commerce which has produced a list of 40 alleged subsidy programs promoted by the Australian government including drought relief, wine tourism programs, vineyard expansion incentives and export development grants. Australia has denied the programs give local producers an export advantage.

China heavily subsidises its own winemakers with annual grants of up to $100,000.

"The investigation authority preliminarily determined that there is a subsidy for imported wines originating in Australia [and] the domestic wine industry has suffered substantial damage," the Commerce Ministry said in a statement.

The ministry imposed the anti-dumping tariffs and the subsidy duty after complaints from the China Alcoholic Drinks Association which accused Australian exporters of crowding out local producers.

The hits to Australian goods now encompass more than half a dozen sectors and exports worth up to $20 billion.

The Morrison government has become increasingly assertive in its response to the trade strikes in the past fortnight. The escalation follows months of threats from Beijing for Australia to change its policy positions on human rights and national security.

Agriculture Minister David Littleproud has said the government would work with industries on the next course of action. He said the government would consider taking the disputes with the World Trade Organisation.

"We're not afraid to use the independent umpire," he said. "We think there's mounting evidence now that this is not to do with technical trade matters. It is to do with other matters that they've raised, particularly around our sovereignty, which we will not relent on."

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