• Transcript, E&OE
Topics: China’s anti-dumping investigation into Australian wine imports.
18 August 2020

Simon Birmingham: Well, thanks very much for coming along. Chinese authorities have today announced they are commencing an investigation into claims of dumping of Australian wine into the Chinese market and they’ve also advised the Australian Government that they are considering launching investigations into countervailing duties in relation to Australian wine. We find these suggestions deeply troubling and quite perplexing. Australian wine is by no means subsidised, it is by no means sold at or below anything other than market rates in the world market. Australia’s wine producers have worked hard for years to establish themselves with a reputation for the highest of quality and for being internationally competitive based on their excellence.

Indeed, Australian wine during the first half of this year proved itself to be the second-highest priced wine sold in the Chinese market. The Australian Government will work closely with our wine industry to defend these allegations, to help ensure that we put forward the strongest of possible cases to prevent the application of tariffs or duties on our wine makers. Australia’s wine makers are some of the most innovative and productive in the world. They have grown at the market across China, as they have across many other nations around the world out of their hard work and the quality of their product. We stand by our winemakers at this time, we dismiss these perplexing allegations that somehow Australian wine is dumped onto the Chinese market or sold below market rates or cost rates. We will make sure that we put forward the strongest possible evidence-based case in defence of our wine industry to make sure that these investigations come to a conclusion, as they should, that Australian wine is nothing other than a world-class competitive product.

Question: What is the suggestion that some sort of Australian Government subsidies are contributing to the anti-dumping?

Simon Birmingham: There are suggestions as part of a countervailing duties investigation that certain programs may somehow equate to a subsidy of the Australian wine industry. There is no validity to that. Programs to help recover water and restore environmental flows in the River Murray, for example, or programs that support research and development right across Australian industry in no way equate to subsidy of our wine exports. They shouldn’t be seen in that regard, and certainly we will be outlining the facts in relation to those sorts of programs.

Question: Is this anti-dumping probe a political tactic by China?

Simon Birmingham: That’s really a question for China. It’s within the right of any country to receive an application from its industry into matters of dumping, and of course to investigate that application. We will make sure we put forward the strongest possible case in response to that, outlining there is no dumping, there is no subsidy, there’s only world class wine priced as it should be, at world-class prices.

Question: A $1 million grant program for Australian wine businesses to drive exports was announced ten days ago. When Australia is splashing around grants like this, can China be excused for concluding that we are subsidising winemakers?

Simon Birmingham: As I said before, the evidence shows that Australian wine was the second highest priced after only New Zealand in the Chinese market in the first half of this year. Now, that shows that our wine is priced at the premium end, reflecting its premium quality. Now we, like every other country on the planet, have certain measures that encourage exporters in terms of their market development. We don’t subsidise production, we don’t subsidise exports, our exports are priced according to market conditions.

Question: Is this a result of any tensions between Beijing and Canberra at the moment? In a broader sense?

Simon Birmingham: Our hope and expectation is that these matters should be considered and addressed on their merits, and that means that Beijing and Chinese authorities should look at the evidence. And if they look at the evidence and the case that Australia puts forward, they will find there is no case to find dumping or subsidisation of Australian wine production or exports.

Question: Have you spoken on the phone to your Chinese counterparts since last time you were asked?

Simon Birmingham: No, and that continues to be disappointing. Australia stands ready to engage in constructive discussion with China at any moment, and we will certainly reach out at a political level as well as in terms of providing the evidence to refute these claims.

Question: Is it right then that a possible outcome of this inquiry could be the imposition of tariffs and duties, and if so, how soon could that affect our exports?

Simon Birmingham: The anti-dumping investigation could run for between 12 and 18 months, depending on Chinese processes. So, there is some time in that regard. And whether or not China decides to launch a countervailing duties investigation is a matter up to them. We would hope that they still decide not to proceed with that, and we will engage with them over the course of the next couple of weeks in that regard. If they do, then we would expect it would probably run a similar 12 to 18 months’ timeline.

Now, there are opportunities within that for interim orders to be made. We would argue against the application of any such interim duties on the basis that we think we have a clear and compelling case to refute all allegations of dumping at this time.

Question: Is there any reasons to think that wine would be treated any differently to barley which is already been hammered by tariffs?

Simon Birmingham: I can understand why people would be concerned given the experiences the Australian barley industry has had. And given the fact that what we believed were compelling cases in relation to barley were not found in terms of China’s final determination, and they did proceed with the application of tariffs on Australian barley. We have indicated that we are appealing that through Chinese domestic processes, and also that we will take that through the World Trade Organization for further appeal if those domestic processes are unsuccessful. All we can do at this time is support our winemakers, hundreds of them across Australia in terms of making the strongest possible case in their defence to Chinese authorities. That’s what we’ll be doing. It will be based on evidence and fact, and we are confident that it will be a compelling one.

Question: Is this an industry-wide probe or is it possible that sanctions could be taken against individual exporters?

Simon Birmingham: The investigation has been launched, it seems, into all Australian wine imports into China in containers less than two litres. That essentially equates to most of Australia’s export activity, the vast majority of our export activity. And so it does pose a threat to all producers who export.

Question: Is this economic coercion, the kind that Beijing’s ambassador to China [sic] had threatened?

Simon Birmingham: We do find this deeply troubling, concerning, and as I say, perplexing given Australia’s wine industry is not subsidised to export and is certainly not dumping product on the world market. Now, it’s for China and Beijing to explain the rationale behind these actions and why they have moved to stage of an investigation. As I say, it’s up to any country, and any country can receive an application claiming allegations of dumping, and they can choose to investigate that. But we don’t believe that there is a prima facie case there to warrant an investigation, and that is why we believe there is such strong and compelling evidence to refute it.

Question: You’ve said in the past that this isn’t a trade war, but it has all the hallmarks of it being one. Do you still stand by that statement?

Simon Birmingham: Well, Australia is certainly not engaging in any type of war. What we want is a constructive trading relationship, one where we can work together in the areas of mutual interest. And what we have seen over a period of decades of economic and commercial engagements now is that our cooperative relationship between China and Australia is of mutual and beneficial interest. It has sustained economic growth across both our countries. It has helped to drive better living standards across both of our countries. And that is why we want to see that continue in the future.

Question: Well, how is our trade relationship going with China considering you’re not speaking with your counterpart there?

Simon Birmingham: We’ve continued to see very strong trading volumes with China throughout the course of this year, notwithstanding the impact of COVID-19 and the disruption that saw the essential shutdown of the Lunar New Year, the closure of many areas of freight activity and disruption of those supply chains. And yet for many areas of economic activity, we’ve continued to see many strong flows of goods, products in both directions. And that’s why we can see those continued mutually beneficial aspects of the economic relationship, the trade relationship, and why we think it is in both country’s best interest to maintain that.

Thanks, guys. Cheers.