China and Australia Reach Agreement on Wine Tariffs, Signaling Improved Relations
Australia’s Prime Minister, Anthony Albanese, is set to visit China next month, marking a significant step in the thawing relationship between the two countries. The visit, from November 4-7, will be the first by an Australian leader since 2016. The trip comes after both nations expressed a desire to resolve the ongoing trade dispute, with a focus on ending Chinese tariffs on Australian wine exports.
In a statement from Albanese’s office on Sunday, it was announced that Australia had reached an agreement with China to move forward with resolving the dispute. As part of the agreement, Australia will suspend its case at the World Trade Organization concerning China’s wine import tariffs. Meanwhile, China has committed to an expedited review of its wine tariffs, a process that is expected to take five months.
However, should the review not result in the removal of the duties, Australia reserves the right to resume the dispute in the WTO. Nevertheless, both sides expressed confidence in achieving a successful outcome.
The agreement on wine tariffs represents another step towards normalizing relations between China and Australia. Earlier this month, China released Australian journalist Cheng Lei, who had been detained for nearly three years on charges of passing national secrets to a foreign institution. In response, Australia announced the end of anti-dumping tariffs on Chinese exports of wind towers and granted a Chinese firm the continued lease of a port in the country.
Following Australia’s announcement, China’s Ministry of Commerce stated that the two nations had engaged in friendly negotiations regarding wine and wind tower disputes and had reached a consensus on resolving them. Although specific details regarding the next steps in relation to China’s wine tariffs were not provided, it is clear that progress is being made.
China imposed steep tariffs on Australian wine in 2020 amidst a deterioration in diplomatic ties between the two countries. The wine market had been Australia’s most valuable before the implementation of these tariffs, with exports amounting to over A$1 billion (US$631.4 million) in 2018-19 and 2019-20 according to the nation’s agriculture department.
Australian vintner Treasury Wine Estates Ltd. saw its shares rise by up to 5.3% after the agreement with Beijing was announced. The company expressed confidence in its ability to rebuild its business in China if the tariffs are indeed removed after the review period.
This development regarding wine tariffs follows China’s earlier decision in August to remove penalties on Australia’s barley exports, which facilitated the resumption of trade. Australian Agriculture Minister Murray Watt highlighted the similarities between the agreements on wine and barley, noting that both involved a review process that ultimately resulted in the removal of trade barriers.
Prime Minister Albanese’s upcoming visit to China follows his arrival in Washington on Monday to kick off a month of critical diplomatic engagements. While in China, he will meet with President Xi Jinping and Premier Li Qiang in Beijing. The leaders are expected to discuss cooperation in various areas, including economic links and climate change, among other shared interests.
Albanese emphasized the importance of returning Australian products, including wine, to the Chinese market and acknowledged the benefits of strong trade between the two countries.
The agreement on wine tariffs represents a significant breakthrough in the Australia-China trade dispute and indicates a positive shift in relations. As both nations continue to engage in dialogues and negotiations, it is hoped that further progress can be made in various areas of mutual interest and benefit.
