It was a bolt from the blue.
On Thursday, China's government suddenly announced it would raise a dispute at the World Trade Organization (WTO) against Australian anti-dumping duties on three of its exports.
At first glance, the products seemed to have been picked out almost at random.
Beijing declared it was challenging Australian duties on Chinese stainless steel sinks, wind towers and railway wheels.
China gave no advance notice to Australia, and senior ministers were quick to publicly label the move "petty".
After all, the announcement came only five days after the federal government announced it would launch its own complaint at the WTO against Beijing's crippling tariffs on Australian wine.
On the face of it, it looked like a clear act of tit-for-tat retaliation.
But why has China targeted Australia in this way at the WTO? What is their exact complaint? Might it have some merit? And how is this likely to play out?
What is dumping?
"Dumping" refers to the practice of exporting goods below their normal prices, either to win market share or to get rid of excess products.
It is prohibited under WTO rules, and when it is identified the importing country is allowed to impose "anti-dumping duties" to return the goods to a normal price.
Australia has imposed dozens of anti-dumping measures against overseas goods, particularly from China.
This isn't surprising, and nor is it necessarily evidence of Australia discriminating against China.
Flickr: Ken Hawkins
)"China is the biggest exporting economy in the world and its economy is also overrun with overproduction," Richard McGregor, a China expert at the Lowy Institute, says.
But he says China has "long had a bee in its bonnet" about anti-dumping actions taken by Australia against its exports.
"They've never taken us to the WTO over it. I suspect they've been keeping these cases up their sleeve to do just that," Mr McGregor says.
"And Australia's announcement for the wine case was the trigger for them to do that."
So, does China's case have any merit?
Right now, it's very difficult to say.
Beijing is essentially alleging that Australian taxes on those three products are unfair because they're not being dumped — but simply sold at a fair price, above the cost of production.
A Commerce Ministry spokesman declared it was taking the action to "safeguard the multilateral trading system".
"China opposes the abuse of trade remedies, which not only damages the legitimate rights and interests of Chinese enterprises, but also damages the seriousness and authority of WTO rules," he says.
But the ministry hasn't yet provided the details of its complaint, so experts have little material to work with.
"The issue at stake is not how many times Australia has applied these duties to China, but whether it has done so according to longstanding WTO rules," trade expert Jeffrey Wilson, from the Perth USAsia Centre, says.
"Until the full details of the Chinese allegation are published, it is impossible to say whether they have a strong case."
ABC Radio Darwin: Jesse Thompson
)The government is already making it clear it sees this complaint as frivolous and vexatious, with Finance Minister Simon Birmingham labelling the move "more petty than provocative".
"Our systems, our processes are strong ones, are transparent ones and stand in contrast to the type of approach that was used in China's decision against our wine and barley," Senator Birmingham has said.
Dr Wilson says that's a reference to the fact that Australian politicians can't simply hit any old product with anti-dumping penalties on a whim.
Of course, that doesn't mean our record is flawless.
Has Australia lost a case like this before?
Yes, it has.
In 2019, the WTO backed an Indonesian complaint against Australian anti-dumping tariffs on A4 paper, concluding that Australia had made flawed assumptions about pricing.
ABC Gippsland: Robert French
)The federal government didn't appeal against the ruling and it dropped the anti-dumping tariffs.
Still, Dr Wilson points out that Australia's record on this front remains strong.
"Out of hundreds of cases, only once has a commission-mandated duty been struck down by the WTO," he tells the ABC.
Mr McGregor of the Lowy Institute says it "may well be the case" that Australia's system is robust and fair.
But he says given Australia applies anti-dumping tariffs so regularly, it will be good to have them tested again at the WTO.
And he suggests China might well have been emboldened by Indonesia's win in 2019.
"They might have seen the Indonesia case as a precedent they can follow," he says.
The complaint will also put additional pressure on the relatively small teams of hard-working — and already overstretched — Australian officials with responsibility for disputes like this.
Even if Australia wins comfortably, defending the case will consume time and energy, and distract trade officials from focusing on Australia's two WTO prosecutions against China for barley and wine.
And that might be reason enough for Beijing to press ahead, even if its prospects of victory are weak.
https://news.google.com/__i/rss/rd/articles/CBMiUWh0dHBzOi8vd3d3LmFiYy5uZXQuYXUvbmV3cy8yMDIxLTA2LTI2L2NoaW5hLXd0by1hbnRpLWR1bXBpbmctZXhwbGFpbmVyLzEwMDI0NTA0NtIBKGh0dHBzOi8vYW1wLmFiYy5uZXQuYXUvYXJ0aWNsZS8xMDAyNDUwNDY?oc=5
2021-06-25 19:08:19Z
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