Australia rules out potential ‘package deal’ on China wine tariffs to pursue existing WTO case

The Australian government is continuing to pursue a WTO case against China over crippling wine tariffs, rejecting a reported package deal on offer from China that seeks better terms for Chinese wind towers, railway wheels and stainless steel sinks.

According to China-based website Vino-Joy, the agriculture, forestry’s and fisheries minister Murray Watt said that the government regards the two dispute (steel and wine) as “entirely separate matters” and would seek to resolve  trade issues through dialogue, resisting the move to lump them together as one dispute.

Speaking at the weekend, Watt noted the “great work” that the Australian prime minister, foreign minister, trade minister and others had done in stabilising the country’s relationship with China, which was “paying dividends for our farmers in areas like barley, horticulture, cotton and others”.

However he said wine remained an issue that the government wanted to see resolved through dialogue, citing the resolution of the barley dispute earlier this year – which was resolved after Australia dropped its WTO case.

Watt noted that before the tariffs had been imposed, trade had been worth around a billion dollars to Australia but was now $16m a year now.

“So it is important,” he said. “We will continue our case before the WTO about China’s anti-dumping tariffs when it comes to wine.”

He also noted that the disputes over wine and steel were “entirely separate matters”.

“We will continue our WTO case when it comes to wine and we will continue to defend the case when it comes to steel, but we hope that all of these thing also be resolved by dialogue,” he said.

The WTO dispute was raised by Australia in June 2021, following the imposition of tariffs in 2020. Although an arbitration panel was assembled in March 2022, it was note expected to issue its final report before mid-2023 at the earliest.

However, there has been some evidence of thaw in tensions between the two countries, with Australian prime minister Anthony Albanese meeting Chinese president Xi Jinping in November 2022 – the first time that leaders from the two countries have met in six years – and another visit announced earlier this month.

In January, China lifted its unofficial ban on Australian coal , and its bans on timber and beef imports from Australia were also expected to be relaxed. In March, the former Australian Ambassador to China, Dr Geoff Raby later told an event organised by the China Australia Chamber of Commerce and sponsored by Australian wine exporter Auswan, that the two countries were “on the right track” to resolving the deadlock.

China’s trade tariffs on wine originally came into effect in November 2020, imposing a charge of 107.1 – 212.1% on wine exports initially (the rates varied by company), which subsequently rose to 116.2 – 218.4% in March 2021. The punitive export sanctions contributed to wiping AUD$2.08 billion off the value of Australian wine exports in the year to 30 June 2022.