Anti-dumping duties: Australia denies China’s request to set up WTO panel

China’s attempt to form a panel at the World Trade Organization (WTO) to mediate a dispute over anti-dumping duties imposed on Chinese exports has been denied, further straining relations between the two countries.

During a meeting on Tuesday, Canberra rejected Beijing’s request for the WTO to look into levies it imposed on Chinese railway wheels, wind turbines, and stainless steel sinks between 2014 and 2019, according to a Geneva-based trade official.

China, on the other hand, will be entitled to submit a second request.

After Australia challenged Chinese taxes on its wines and barley, informal talks between the two nations over the dispute fell apart in August.

Since Canberra, without consulting Beijing, called for an independent study into the origins of the coronavirus last April, trade and bilateral relations between Australia and China have deteriorated.

According to the official, Australia’s trade remedies system is rules-based and transparent, and the duties are applied to defend local businesses and manufacturers.

The government also stated that it will continue in good faith conversations with China to resolve the issue, as it did in the past.

China stated the Australian duties “violated the WTO’s trading rules, anti-dumping and anti-subsidy regulations” in its request for arbitration.

According to WTO records, Beijing claims that Canberra did not use the correct Chinese costs of production when deciding whether its products were marketed at discriminatory rates in the Australian market.

Anti-dumping and anti-subsidy tariffs are protectionist levies imposed by governments on imports seen to be below fair market value, usually at prices lower than the exporting country’s domestic markets.

The world’s second-largest economy also claimed, according to WTO documents, that Australia had unfairly ignored Chinese accounting records in dismissing Chinese costs of manufacturing as invalid.

Between 1995 and 2020, Australia imposed 85 anti-dumping and anti-subsidy tariffs against China. Beijing had not objected to any of them until recently.

During the same time period, China imposed four anti-dumping and anti-subsidy tariffs on Australian goods. These lawsuits are still pending before the World Trade Organization.

Because it considers Chinese data to be “distorted,” Australia has traditionally used proxy prices – rather than Chinese pricing – to determine anti-dumping levies against China, a practise that trade lawyers say has enraged Beijing in the past.

Canberra, on the other hand, has questioned Beijing’s motivation for filing the complaint, pointing out that the levies on railway wheels, wind turbines, and stainless steel sinks were levied years ago.

After China filed arbitration, Australian trade minister Dan Tehan said last week, “We are convinced our actions are compliant with Australia’s WTO responsibilities and will vigorously defend them.”

“Australia is a staunch supporter of the multilateral trading system based on rules, and we accept any WTO member’s right to bring their complaints to the WTO.”

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