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International law academics say ‘normal’ anti-dumping action a ‘tit for tat’
Academics specialising in China trade laws cautioned Australians that the current anti-dumping investigation should not be seen as an “escalation of diplomatic tensions”.
Naomi Neilson
China has launched an investigation into whether Australian winemakers “dumped” its bottles of wine at deliberately lower prices than the cost of production in an attempt to crowd out local producers and claim a bigger market share.
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Although the move comes amid rising tensions, professors with the University of New South Wales (UNSW) cautioned Australians from assuming that the move was related to tension since it called for an independent probe into the origin of COVID-19.
International economic law and international law disputes professor Dr Weihuan Zhou said the investigation is a “normal” anti-dumping action that all governments undertake under the World Trade Organisation rules. This action marks the second anti-dumping action from China, while Australia currently has 18 (out of 27) measures on China.
“Rather [than diplomatic tension], it is more likely a typical tit-for-tat action in the narrow field of anti-dumping, in response to Australia’s longstanding practice of treating China as a non-market economy in a series of anti-dumping investigations,” Dr Zhou said.
Dr Zhou said China has been “considerably less aggressive” in its action. He conceded that it will have “significant impacts” on Australian wine procedures and exporters who may not find an alternative market of a comparable size: “In comparison, the Chinese importers may find it relatively easier to switch to other sources, such as France.”
In 2019, China bought $1.25 billion worth of Australian wine, or more than one-third of Australia’s wine exports by value. From the year to March, it came to 130 million litres.
The investigation comes after May’s decision to suspend exports from four Australian abattoirs selling beef to China for not meeting labelling requirements. Days earlier, the country announced huge tariffs on Australian-grown barley, typically used in beer.
In a statement on the anti-dumping action, Treasury Wine Estates (TWE) – which is in a trading halt after plunging almost 15 per cent – said it “would cooperate with requests for information from Chinese and Australian authorities” and it has a respectable, long relationship with China and “its team, partners, customers and consumers”.
Although China can switch to alternative markets, an international law and trades law academic Professor Heng Wang said China’s imports can be affected by the drop from its foreign reserve that is related to the ongoing COVID-19 outbreak.
“Domestic industry that suffers from economic slowdowns in China may file new anti-dumping investigation applications,” Professor Wang said. “They can affect producers that are not daily necessities but face fierce competition in the Chinese market, since they can be imported from various states and be produced locally.”
