Bottles of Penfolds Grange, made by Australian winemaker Penfolds and owned by Australian company Treasury Wine Estates, are placed on a shelf for sale at a wine shop in central Sydney, Australia, August 4, 2014. Photo: Xinhua / REUTERS
Australia has complained of setbacks in trade with China on various occasions in recent months. Those complaints are unlikely to end if Canberra continues its bad approach by focusing on political coups.
The Australian government said on Saturday it would file a formal complaint with the WTO over China’s imposition of allegedly high anti-dumping tariffs on Australian wine exports.
The move, which is the second time in six months that Australia has taken its trade dispute with China to the WTO, marked a further escalation in trade tensions that will see the knot tighten between the two countries. It also came just days after Australia called for a tougher stance against so-called “economic coercion” from China at the G7 summit.
Even with the iron ore trade buffering trade disputes between China and Australia, the downward spiral of bilateral trade relations has been faster than many expected over the past year. The irony is that the Morrison government has appeared keen to resolve trade issues with its largest export market, only to see the stalemate escalate. Of course, all of the development is understandable if you take a closer look at Canberra’s efforts during the process.
As an obvious disruptor to Sino-Australian relations from the start, Canberra politicized trade and economic issues in an attempt to pressure China to strengthen its alliance with the United States. This is also the reason why concerns over the deterioration of relations with its largest trading partner failed to prompt Australian politicians to reflect the root cause of the country’s economic tensions with China, which apparently seemed to prefer pressure China on all fronts to resolve trade issues.
On the contrary, Canberra’s preference for trying to pressure other parties when it comes to bilateral disputes reflects its implicit ideological bias and arrogance towards non-Western countries.
Australia may think it can put pressure on China by bringing it to the WTO, but China has enough evidence to support its trading practices. China’s decision to impose anti-dumping tariffs on Australian wine is based on facts and trade rules.
According to a request filed by the China Alcoholic Beverages Association, Australian wine exports to China reached 120,800 kiloliters in 2019, up 113% from 2015. During the same period, the average price at Australian wine exports fell 13.36% on the Chinese market. Negatively affected by cheap wine imports, China’s domestic production of similar wine products suffered a significant drop of 61.11%, from 1.16 million kiloliters in 2015 to just 451,500 kiloliters in 2019.
Australia’s indiscriminate move on the wrong track will not lead to the expected results and will only increase anxiety in business and capital markets.
Ultimately, no matter how Canberra calls China’s tariffs “economic coercion” or has united its allies to counter China’s economic influence, it won’t help solve its trade woes. To ease tensions with China, Canberra must first repair the damage it has done to bilateral ties.