Australia may face yet more China trade risks if a Chinese anti-dumping probe into wine leads to trade sanctions, according to Perth USAsia Centre Research Director Dr Jeffrey Wilson.
“China’s trade probe against Australian wine repeats the technique used recently against barley – dressing up what is fundamentally a political sanction in the guise of a ‘technical’ trade measure,” Dr Wilson said.
The comments come after an announcement from China’s Ministry of Commerce that it will investigate whether Australia is “dumping” – selling below normal cost – wine in the Chinese market. It also follows the recent release of Dr Wilson’s analysis brief, which highlights the risks the Australia agriculture sector faces from over-reliance on China, and the need to diversify to new markets such as Indonesia, India and Vietnam.
“Australia exported $2.9 billion of wine in 2019, about a third of which goes to China.”
“China is our largest wine export market by a wide margin. If this investigation leads to anti-dumping duties being applied, it will be a heavy blow for an industry that is an important employer in regional areas,” Dr Wilson said.
Dr Wilson’s analysis brief - Political risks for the Australia-China agricultural trade
- was released by the Centre last week. It highlights what Australia could be facing should China expand trade sanctions which began earlier this year on beef and barley.
“The Chinese Ambassador publicly threatened the wine trade in April. It therefore stretches credulity to suggest this is just a routine trade investigation,” Dr Wilson said.
The analysis calls for Australia’s farm industry to act now, focusing market development on less risk-exposed markets in the Indo-Pacific, such as Indonesia, India and Vietnam. Dr Wilson also highlights that the nation’s agriculture industry faces unprecedented headwinds in its largest export market, with grains, beef, seafood, dairy, wine, horticulture and cotton trades with China at the greatest risk.
to download the full analysis brief.
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