HomeFutures and CommoditiesAustralia remains optimistic for a wine breakthrough with China as deadline approaches,...

Australia remains optimistic for a wine breakthrough with China as deadline approaches, boosting industry prospects.

Hopeful for Breakthrough in Australia-China Wine Dispute

Australian Prime Minister, Anthony Albanese, remains optimistic about resolving the trade dispute with China over wine tariffs. As the deadline for the World Trade Organization (WTO) ruling approaches, Albanese expresses hope for a breakthrough.

The trade dispute emerged when China imposed tariffs on Australian wine, resulting in a billion-dollar export trade halt. Australia lodged a complaint with the WTO in 2021, leading to an extended investigation by a dispute panel a year ago.

Albanese emphasizes the significance of finding a resolution, highlighting the substantial exports Australia’s wine industry had to China prior to the tariffs imposed in 2020. He states, “I’m very hopeful of a breakthrough that removes the impediments when it comes to wine.”

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Under the WTO dispute-resolution process, a report is shared with each party involved before being made public three weeks later. Australian officials are unable to comment on the WTO report until its publication. However, Trade Minister Don Farrell expressed confidence in the case earlier this month.

Australia temporarily suspended its complaint over Chinese barley tariffs in April to allow China time to review the 80.5% duties imposed in 2020, which Beijing subsequently removed. The Australian government intends to continue pursuing the case until the tariffs are lifted.

Albanese plans to visit China this year, marking the first visit by an Australian leader since 2016. The relationship between the two major trading partners has improved since Beijing eased restrictions on various Australian exports that were imposed during a diplomatic dispute.

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Impact of the Dispute

Before the COVID pandemic, China was Australia’s top wine export market, reaching A$1.2 billion ($770 million) in the 12 months leading up to January 2020. However, the figures plummeted to only A$8.1 million ($5.2 million) in the year to June 2021.

China has sought Australia’s support in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a free-trade agreement among twelve countries on the Pacific Rim, which incorporates WTO rules and obligations.

The Australian government remains committed to resolving the wine dispute and lifting the tariffs. With hopes for a breakthrough, both countries aim to restore a positive trade relationship and foster economic growth.

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