Australia rejects China’s request to set up WTO panel to mediate row over anti-dumping duties

Beijing had requested a WTO panel to be established to hear grievances over Canberra’s anti-dumping measures on products including railway wheels and wind towers
Australia blocked the appeal saying the duties were imposed to protect local industries but agreed to continue talks with China to resolve the matter

Australia

Su-Lin Tanin Singapore

Published: 10:53am, 26 Jan 2022

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Australia has blocked China’s request to establish a panel at the World Trade Organization (WTO) to arbitrate a dispute on anti-dumping duties imposed on Chinese goods, further straining ties between the two sides.

Canberra rejected Beijing’s appeal for the WTO to examine tariffs it levied on Chinese railway wheels, wind towers and stainless steel sinks between 2014 and 2019 during a meeting on Tuesday, a Geneva-based trade official said.

China, however, will be able to make a second request.

Informal discussions between the two countries over the dispute fell through last August after Australia challenged Chinese tariffs on its wines and barley.

China seeks WTO arbitration on Australia’s anti-dumping tariffs

Trade and bilateral relations between Australia and China have plummeted since Canberra called for an independent investigation into the origins of the coronavirus last April without consulting Beijing.

Australia said its trade remedies system was rules-based and transparent and the duties were imposed to protect local industries and manufacturers, according to the official.

The government also said it would continue discussions with China in good faith as it had in the past to resolve the matter.

In requesting arbitration, China said the Australian tariffs had “violated the WTO’s trading rules and anti-dumping and anti-subsidy regulations”.

Beijing contests that Canberra did not apply the right Chinese costs of production in determining whether its products were sold at unfair prices in the Australian market, WTO documents showed.

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Anti-dumping and anti-subsidy duties are protectionist tariffs that governments impose on imports that they deem to be below fair market value, usually at prices lower than the exporting countries’ domestic markets.

According to WTO documents, the world’s second-largest economy also alleged Australia had unfairly disregarded Chinese accounting records in its decision to dismiss Chinese costs of production as invalid.

Australia slapped 85 sets of anti-dumping and anti-subsidy tariffs against China between 1995 and 2020. Until now, Beijing had not contested any of them.

During the same period, China initiated four sets of anti-dumping and anti-subsidy duties against Australian products. These cases are still before the WTO.

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Australia has historically used proxy prices – instead of Chinese prices – to determine anti-dumping duties against China as it regards Chinese numbers as “distorted”, a practice that trade lawyers say has angered Beijing in the past.

Canberra, on the other hand, has questioned Beijing’s motive for lodging the complaint over tariffs on railway wheels, wind towers and stainless steel sinks, pointing out that these were imposed years ago.

“We are confident our measures are consistent with Australia’s WTO obligations and will robustly defend them,” Australian trade minister Dan Tehan said last week after China requested arbitration.

“Australia is a strong supporter of the rules-based multilateral trading system and we respect the right of any WTO member to take its concerns to the WTO.”