China’s Ministry of Commerce (MOFCOM) said in a November 27 announcement that China has found dumping of wine imports originating in Australia, “material injury to the relevant domestic wine industry in China, and a causal relationship between dumping and material injury”. China decided to impose “provisional anti-dumping measures in the form of a margin” on the above products from November 28. The rate will fluctuate between 107.1% and 212.1%.
Recently, Chinese Embassy officials in Australia disclosed to the Australian media a list of 14 items of grievances against Australia, including: funding for the Australian Strategic Policy Institute (ASPI) to conduct “anti-China” research; and raids on Chinese journalists in Australia. In the past few weeks, Bloomberg has reported that the bulk of the 66 ships loaded with Australian coal have been parked in Chinese waters, mostly in the ports of Jingtang and Caofeidian.
Previously, Bloomberg reported that 66 bulk carriers loaded with Australian coal, mostly in the ports of Jingtang and Caofeidian, had been berthed in Chinese waters over the past few weeks and were not allowed to unload their cargoes. According to the report, the ships were carrying about 5.7 million tons of Australian coal, with a cargo value of more than $500 million. The ships have been waiting for a month or more to unload their cargoes, and as many as 1,000 crew members have been stranded on board. The Chinese Ministry of Commerce (MOFCOM) announced three categories of companies that have imposed a bond on Australian wine, including the three Australian companies that were sampled, the 21 other companies that cooperated with the investigation, and other Australian companies.
The announcement from China’s Ministry of Commerce reads, “From November 28, 2020, import operators shall provide the corresponding margin to the Customs of the People’s Republic of China when importing products under investigation, based on the margin ratio of each company as determined by this preliminary ruling.” It is reported that, starting from Saturday, import operators should provide a corresponding bond to the Customs of the People’s Republic of China when importing wines originating from Australia, based on the dumping margin of each company as determined by this preliminary ruling. The deposit will be levied on the duty-paid price approved by the Customs, calculated as follows: deposit amount = (duty-paid price approved by the Customs x deposit collection rate) x (1 + import VAT rate). The announcement states that stakeholders have 10 days from the date of this announcement to submit written comments to the investigating authority.
Shares of Fognac Wine Group (TWE), one of Australia’s largest wine exporters, plunged more than 11 percent after the news of Beijing’s crackdown on Australian wine was confirmed. The company initially suspended trading, then confirmed it would suspend trading until next Tuesday. Tony Battaglene, CEO of the Australian Grape and Wine Association, said the tariffs imposed by China will put Australian wine exporters in a difficult position. He said, “China is a big market for us, but some of our major competitors, especially from Europe, are (now) getting a 100 to 200 percent tariff advantage and that’s going to make it very difficult to compete …… which won’t be good. “
Australia’s Trade Minister Simon Birmingham, who has repeatedly called for unsuccessful negotiations with Chinese officials, also said the tariffs were “devastating” to the Australian wine industry. He said, “The cumulative impact of China’s trade sanctions on a number of Australian industries this year has created a real sense that these actions are being taken as a result of, or in response to, a number of other factors. He continued, “This is completely inconsistent with the commitments that China has given through the Australia-China Free Trade Agreement, and through the World Trade Organization. It is incompatible with a rules-based trading system.” “It would make wine trade with China unviable for many companies. Obviously we don’t think that’s reasonable and there’s no evidence to support that,” he said.
In addition, Australian Agriculture Minister David Littleproud said Friday that Australia would not compromise its policy position because of trade threats. He said, “That’s what an elected Australian government of any political persuasion would do. We will never, ever compromise any of those values and principles. We are a sovereign nation and we want to be respected as a sovereign nation.” He quoted former British Prime Minister Margaret Thatcher, who said, “We will not turn around.”
In Beijing, Chinese Foreign Ministry spokesman Zhao Lijian said at the day’s regular press conference on related issues that the China-Australia dialogue channel has been open and smooth, and that some people on the Australian side should reflect on themselves; Australia should seriously consider China’s concerns rather than undermine China’s interests. He said that the relevant departments of the Chinese side take measures against imported goods in accordance with the law, which is responsible for the domestic industry and consumers; a healthy and stable China-Australia relationship is in the fundamental interests of the two peoples, and the Australian side should do more for the benefit of the relationship between the two countries.