China has agreed to review the tariffs it imposed on Australian wine, providing a pathway for them to be removed by early next year.
China announced in March 2021 that it would apply duties of up to 218.4% on most Australian wine exporters, following allegations of dumping of Australian wines in China.
The decision saw trade worth $898 million in 2020 plummet to just $8.1 million in the year to June 2023.
Prime Minister Anthony Albanese said in a statement: “We have now reached an agreement with China to move forward to resolve this dispute. We welcome China’s agreement to undertake an expedited review of its duties. This process is expected to take five months.
“Australia and China have agreed we will suspend the dispute on wine in the WTO pending the outcome of this review. If the duties are not removed at the end of the review, Australia will resume the dispute in the WTO. We are confident of a successful outcome.”
The Prime Minister will travel to the People’s Republic of China from 4-7 November 2023. It will be the first bilateral trip by an Australian prime minister to China since 2016.
In Beijing, the Prime Minister will meet with President Xi Jinping and Premier Li Qiang. In Shanghai, the Prime Minister has accepted Premier Li’s invitation to attend the China International Import Expo.
“I look forward to visiting China, an important step towards ensuring a stable and productive relationship.”
“I look forward to further engaging with President Xi and Premier Li in Australia’s national interest.”
“Prime Minister Whitlam’s historic visit laid the groundwork for the diplomatic, economic and cultural ties that continue to benefit our countries today.”
“I welcome the progress we have made to return Australian products, including Australian wine, to the Chinese market. Strong trade benefits both countries.”
Australian Grape & Wine welcomes review
Australian Grape & Wine CEO Lee McLean said he welcomed the announcement that China has agreed to expedite a review of its wine import duties.
“This is another very positive step towards the removal of import duties on wine that would see the resumption of Australian wine exports to China,” said McLean.
“It has been a very difficult time for Australia’s grape growers and wine producers in recent years following the loss of China as our major trading partner, the global pandemic and various weather events, so this is very welcome news for grape growers and winemakers across the country.
“The review process by the Chinese Government is expected to take five months and Australian Grape & Wine will engage in and support that process in any way we can. We understand Australia will suspend the wine dispute in the World Trade Organisation pending the outcome of this review.”
Australian Grape & Wine President John Hart OAM and McLean visited Shanghai last week and met with the Chinese Alcoholic Drinks Association to discuss common objectives and significant opportunities for the two industries to collaborate in the future.
“The re-engagement with China at the political, government officials and industry-to-industry levels has enabled the positive dialogue that has led to this decision ,” said Mr McLean. “We have said from the beginning that dialogue between the parties would be critical to resolving this dispute, and we have taken a major step towards this today.”
“Australian Grape & Wine has worked closely with the Australian Government and the Department of Foreign Affairs and Trade over recent years to foster a mutually beneficial solution that advances the interests both Australia and China. We acknowledge the work of ministers and officials in rebalancing the relationship with China, facilitating the resumption of trade in commodities such as coal, timber, barley and hay.
“China holds a pivotal position in the global wine market for Australia. Before the imposition of import duties, the value of Australian wine exports to China was $1.2 billion. Regardless of the outcome, we remain committed to diversifying our market presence and cultivating opportunities in markets across the world.”
New era for Treasury Wine Estates in China
Treasury Wine Estates said in a statement that it welcomed the announcement from the Australian Government that a
review will commence into Australian wine tariffs.
CEO Tim Ford said: “It’s great news to see an agreement for a path forward to allow our Australian brands and wine to be sold
in the Chinese market.
“There are only positives to come out of a favourable tariff review for the Chinese consumer, customers and wine category, for the Australian wine industry and for TWE.
“Both governments have worked constructively to achieve this outcome and we now look forward to a new era of positive engagement that will ultimately build a strong and growing China wine category should the review see the removal of these tariffs.”
NSW Wine adds its support
NSW Wine Industry Association President Mark Bourne has also welcomed the announcement by Prime Minister
Albanese that China has agreed to a review of the 220% import duties currently imposed on Australian bottled wine.
“This is an encouraging step forward that will hopefully lead to the removal of Chinese import duties on Australian wine,” said Bourne.
“It is currently a very difficult time for the wine industry. Following several seasons of challenging weather events and the Covid pandemic, we are now facing worldwide falling consumer demand and an oversupply of wine.
“The announcement of a potential pathway to resolve the multi-year trade dispute, and the reopening of the Chinese market, is positive news for many grape growers and winemakers across NSW.”
Bourne said that several industry delegations to China over recent months have supported the hard work by the Federal Government. NSW Wine has worked closely with the national peak wine industry organisations, Australian Grape & Wine and Wine Australia, in identifying common objectives and opportunities for the Australian and Chinese wine industries to collaborate and foster a mutually beneficial solution that advances the interests of both countries.
Bourne concluded: “NSW Wine has been active in supporting engagement with China that reaches beyond just commerce. Particularly at an industry-to-industry level and in promoting collaboration in research, technology and sustainability which has all added to increasingly positive dialogue between Australia and China.”
Business welcomes China visit to further enhance economic ties
The Business Council of Australia said it supports this critical dialogue with Australia’s largest trading partner.
Business Council chief executive Bran Black said. “The Prime Minister’s forthcoming visit to Beijing and Shanghai will continue the Government’s productive discussions with China’s leadership over the past year.
“We support the ongoing efforts to facilitate trade, which have already yielded the removal of duties on Australian barley, and we eagerly anticipate a constructive and prompt resolution of the wine tariffs issue.
“The BCA warmly welcomes China’s decision to review its tariffs on Australian wines. This development underscores the important role of maintaining robust economic ties between our nations.”
Chair of the BCA’s Global Engagement Committee, The Hon. Warwick Smith AO, added: “China remains Australia’s largest trading partner, accounting for nearly a third of our total trade. The agreement with China to expedite a review of its wine tariffs is a positive step towards resolving our WTO wine dispute. We look forward to a constructive and timely resolution over the next five months.”