Australia is on the cusp of calling in the independent global trade umpire to resolve a major dispute with China.

Key points:

  • Winemakers want China referred to the World Trade Organization over tariffs on Australian wine
  • The trade minister is expected to decide if it will launch an appeal at the WTO shortly
  • Last December, Australia launched a similar appeal against China over its decision to impose tariffs on barley

Winemakers and grape growers argue Beijing needs to be dobbed into the World Trade Organization (WTO) after it imposed crippling tariffs on Australian wine last year.

The tariffs of up to 220 per cent were confirmed in March in response to claims Australia subsidised its winemakers and dumped produce in China.

Australia strongly rejected any suggestion of anti-competitive behaviour, and now industry group Australian Grape and Wine wants the federal government to refer the matter to the WTO.

“The industry as a whole is backing a WTO action,” chief executive Tony Battaglene said.

On Thursday, News Corp reported that Accolade Wines, responsible for major labels Hardys and Grant Burge, did not support a WTO appeal for fear of retaliatory action such as further tariffs.

Accolade Wines, in a statement to the ABC, wouldn’t be drawn on its stance on the appeal.

“We continue to support strong bilateral relations between Australia and key trading partners, and the work of the industry association in advocating for the entire grape and wine sector and its interests at home and overseas,” a spokesperson said.

However, Mr Battaglene said that Accolade Wines had reached consensus with the Australian Grape and Wine board.

“We know that Accolade Wines are not opposing a WTO action if that’s the route the government decides to go,” Mr Battaglene said.

“They’re not putting any pressure on our organisation, or indeed the industry as a whole, or the government not to pursue WTO action if that’s the decided route,” he said.

Concerns about further disruption

A WTO appeal could take up to five years to be resolved and exporters, including those that still have access to China, have raised concerns about further disruption to Australia’s trade while a challenge was underway.

Mr Battaglene said the wine tariff dispute could be resolved earlier and that he did not expect retaliation if Australia did launch a WTO appeal.

“We don’t believe it’s likely to lead to a further deterioration in relationships — I think there’s bigger issues at stake than exports of wine,” he said.

Trade Minister Dan Tehan told the ABC that the government was working closely with the wine industry to resolve the current dispute with China.

“I thank the wine industry for the constructive way they have co-operated with the government,” Mr Tehan said in a statement.

In December, former trade minister Simon Birmingham referred China to the WTO over trade-ending tariffs on Australian barley.

“They’ve already gone down the track with barley and I think it’s logical they’ll extend that to wine,” Mr Battaglene said.

It is understood the barley case is the first instance of Australia referring China to the WTO over an agricultural commodity.

‘Bigger issues at stake’: Wine industry prepares to call in WTO over crippling China tariffs
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