Paris Condemns Chinese Threats on European Wine

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Last week, the Chinese Ministry of Commerce announced the opening of an "inquest" on the importation of wine from the European Union. It is seen as a reaction to the decision by the European Commission to impose a tax on solar panels imported from China.

The EU is due to impose today a rise in customs duties on solar panels made in China, but it will be a lot lower than what was originally proposed and Brussels is expected to continue in discussions with Beijing.

In a communique published on its website, the Chinese ministry reiterates that it is “totally opposed” to the raising of customs duties and said that it hopes that the dispute will be resolved in a bilateral manner.

“The EU insisted on imposing unjustified customs duties on Chinese imports of solar panels,” it said. “The Ministry of Commerce was already called to attention by the interior viticulture sector who are accusing European imported wines of penetrating the Chinese market by using illicit selling methods such as product dumping and subventions,” the Ministry added.

“We have observed a sharp rise in wine imports from the EU in the last few years and we will undertake this inquest in accordance with the law.”

The Chinese solar panel issue is the most serious commercial conflict ever taken on by Brussels and it constitutes something of a test case for the capacity of the countries in the EU to work together on subjects that are sensitive in international trade, despite the threat of reprisals of the countries targeted.

That said, the Chinese position appears to be a largely symbolic one and one of relatively insignificant consequence compared to a situation such as targeting the imports of Airbus, for example.

As for France, it denounced the Chinese threat to increase taxes on wine as “misplaced and reprehensible”.

At the French Ministry of Exterior Trade, a spokesperson said “We’re taking the matter very seriously. We’re studying the implications of the measures which aren’t known with any clarity yet.

“The manner in which the issue was announced seems to us to be misplaced and reprehensible, knowing that the issue was not raised as an economic policy of itself but rather as a decision that was taken in another context entirely.”

Reacting with some prudence, the German Economics Minister Philipp Rösler renewed the call from Berlin to find a negotiated solution, guarding against the danger of escalating to a trade war.

Rising Wine Tide: The middle graph shows the rising share of French wines (in dark green) exported to China.

Rising Wine Tide: The middle graph shows the rising share of French wines (in dark green) exported to China.

Whatever happens, none of it will be of benefit to the Chinese consumers: “We Chinese adore French wines, which are sophisticated and very drinkable,” explains Niu Lanxiang, a young employee setting up his wine stall in a supermarket of the chic Sanlitun quarter of Beijing. “I know that wine is a Western custom but China is still a modern country and we are acquiring a taste for it.” Not all Chinese are fans however, and many of them are in the habit of (horreurs of horreurs) mixing it with American sugared fizzy drinks.

China imported some 430 million litres of wine last year, of which more than one third came from the EU, according to Chinese customs’ statistics. The French would appear to have the most to lose in all of this debacle, having provided their Chinese customers with 170 million litres of wine in 2012.

China is, in fact, the third most important export market in value terms for French wines and spirits, with a total turnover figure of €1 billion in 2012 or 9% of the total of French wines and spirits exports, according to the Fédération des Exportateurs de Vins et Spiritueux de France (FEVS).

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