Australia remains unyielding in its pursuit of a case at the World Trade Organization (WTO) against China’s wine tariffs, its Agriculture Minister has maintained, potentially impeding the anticipated discussions on lifting wine tariffs.
Watt’s declaration, made to Australian media on Sunday, came in response to a proposition made by China earlier in the week, suggesting a collective resolution to the ongoing disputes over wine and steel between the two nations.
China’s Commerce Ministry had signaled a willingness to discuss several matters, including wine, on Thursday after the removal of levies on Australian barley last month. It suggested a “package solution” to address both the wine levies and Beijing’s issues with Canberra’s anti-dumping action on wind towers, railway wheels, and stainless steel sinks.
The Chinese minstry spokesperson He Yadong noted that the wine industry in China is very important and the case invovles over 1000 chinese wine companies. “Based on the resolution of the barley case dispute, we are willing to further enhance mutual trust and cooperation, fully consider each other’s concerns, and promote a ‘package solution’ to the wine case and China’s anti-dumping and countervailing measures against three types of Australian products,” he said.
However, Australia perceives these as completely separate issues.
Australian Agriculture Minister Watt responded by saying, “We see these as entirely separate matters,” and emphasized that Australia will proceed with its WTO case for wine and defend its case on steel. “We will continue to defend the case when it comes to steel — but we hope that all these things can be resolved by dialogue,” he said on Australian Broadcasting Corp. television.
Industry experts and trade watchers had expected wine tariff to be lifted following the same pattern as barley dispute. The barley tariff lifting came after Australia suspensed a WTO complaint against China in exchange for China’s reviewing of its punitive tariffs. The successful removal in August was believed to serve as a template to resolve other trade disputes including wine.
Australia’s pursuing of WTO dispute of wine may therefore derail progressions of wine talks.
The imposition of wine tariffs by China in 2020 severely affected Australia’s lucrative wine export market, plunging its AU$1.3 billion annual wine trade with China and leading to a major surplus of wine, with supply currently equivalent to around 2.8 billion bottles.
China formally slapped up to 218% tariffs on Australian wine imports in March 2021 amidst a deterioration of relations between the two nations, with tensions surrounding various issues, including Australia’s call for an independent inquiry into the origins of the COVID-19 virus and concerns related to national security and human rights.
Despite Australia’s steadfast stance on the wine tariffs issue, Watt highlighted areas where relations with China have stabilized, benefiting sectors like barley, horticulture, cotton, among others. However, he emphasized that resolving the wine tariff dispute is still a priority.
China and Australia’s relations started to thaw last year after two years of deep freeze following Australian Prime Minister Anthony Albanese and President Xi Jinping met in Bali, Indonesia. The two countries have since normalized beef, coal and barley trade, and Australia had expressed hope to resume “unimpeded trade” with China.
The warming of relations have led major Australian wine exporters including Treasury Wine Esates, parent company of Penfolds, to ajust its global shipments in anticipation of much-expected tariff lift, which is rumored to be planned for next year’s Chinese New Year after Albanese’s China trip.
Both nations agree on the importance of dialogue and multilateral channels to resolve the mentioned issues. A mutual understanding and cooperative approach are essential to navigate through the intricate negotiations, find resolutions to ongoing trade disputes, and strengthen bilateral relations between Australia and China.