China trade body urges 'retrospective tariffs' on Australian wine

FILE PHOTO: A bottle of Australian wine is pictured at the Ossie Bar and Restaurant, in Beijing, China August 18, 2020. Picture taken August 18, 2020. REUTERS/Martin Pollard

SYDNEY/BEIJING (Reuters) - A Chinese drinks group has called for retrospective tariffs on Australian wine imports, Australian winemaker Treasury Wine Estates Ltd TWE.AX said on Wednesday, amid escalating trade and diplomatic tensions between Beijing and Canberra.

Treasury, the world’s largest listed winemaker, said in a filing it had been notified that the China Alcoholic Drinks Association (CADA) wrote to China’s Ministry of Commerce (MOFCOM) requesting tariffs on Australian wine as part of a previously announced anti-dumping probe.

The request reflects a deepening trade stand-off between the countries which began a free trade agreement in 2015 but have since seen the relationship cool as Australia joined a global call for an investigation into the origins of the new coronavirus.

In the filing Treasury said it “will continue to engage proactively with its customers in China to both assess the impact of this request on future import orders and support them in any new process requirements.”

Treasury said it didn’t know which products for which CADA proposed tariffs, whether the ministry would apply them retrospectively, nor what the financial impact could be. The company makes most of its profit from Asia, where China is one of its main markets.

Amid the souring of relations, this week the South China Morning Post said China was expected to block imports of sugar, red wine, lobster, barley, coal and copper ore and concentrates from Australia. China said reduced imports of Australian products were the result of buyers’ decisions.

Australian trade minister Simon Birmingham invoked the 2015 free trade agreement on Wednesday, telling local radio Australian exporters did not engage in dumping - exporting below cost to take market share - and that there was “no reason why our exporters should see any disruption”.

“What I would urge Chinese authorities to do is to make it very clear that the commitments they’ve given to Australia under the China Australia Free Trade Agreement ... will be honoured,” he said.

CADA, the Chinese industry body, was not immediately available for comment.

Reporting by Byron Kaye in Sydney, Sophie Yu in Bejing and Nikhil Kurian Nainan in Bengaluru; Editing by Clarence Fernandez and Kenneth Maxwell