China Drops Heavy Tariffs Against Australian Winemakers

People taste red wine from Australia at the Food and Agricultural Products exhibition in Shanghai, China on Nov. 5, 2020. STR/AFP via Getty Images

Beijing has abolished heavy tariffs against Australian wine, a week after Chinese Foreign Minister Wang Yi visited Australia.

The Chinese Communist Party (CCP) agreed to review the wife tariffs five months ago and has since gradually unwound the trade barriers.

China’s Commerce Ministry said on March 28 it was “no longer necessary” to impose anti-dumping duties and other levies on imports of Australian wine.

Prime Minister Anthony Albanese said the outcome came at a critical time for the Australian wine industry.

“The re-entry of Australian bottled wine into the Chinese market will benefit both Australian producers and Chinese consumers,” he said.

“We acknowledge and thank Australian grape growers and wine producers for their fortitude and support during a challenging period.”

The trade barriers were imposed when the Australia-China relationship was at its nadir in 2020. After former PM Scott Morrison called for an independent investigation into the origin of COVID-19 at the time, the Chinese regime retaliated with a series of trade bans, including coal, barley, cotton, wine and beef.

The wine tariff, which amounted to a tax of 220 percent, prevented Australian producers from exporting wine to China.

In 2019, Australian wine exports to China were worth $1.1 billion (US$770 million).

Labor Seeks To Improve Trade Ties With CCP

As a result of the removal of duties, Australia will drop legal action against China at the World Trade Organisation that was initiated by the former coalition government.

Mr. Albanese said the Australian government’s approach is to “co-operate with China where we can, disagree where we must and engage in our national interest—the outcomes on barley and wine reflect that approach.”

“We will continue to press for all remaining trade impediments affecting Australian exports to be removed, which is in the interests of both Australia and China,” he said.

South Australian Wine Industry Association president Kirsty Balnaves said the Chinese market had changed since the duties were imposed.

“In-market competition for wine is now much stronger than before, meaning that there are increased choices for consumers at various price points,” Mr. Balnaves said.

“In addition, alcohol consumption has declined and opportunities for consumption, such as events, have reduced.

Ms. Balnaves added that South Australian exporters would need to visit the market to assess opportunities, create awareness, provide education, and re-introduce their wines to consumers, something that would take time.

Mr. Albanese said his government had been pushing for Beijing to abolish the remaining trade barriers, including rock lobster and beef.

Trade Diversification

While Beijing’s trade barriers have resulted in a significant decrease in Australian exports’ to China, they have opened up alternative markets for other Asian trading partners and pushed Australian companies to diversify their suppliers, including India, Japan, South Korea, Singapore, Taiwan and Vietnam.

“Japan has recovered ground as a market for Australia’s exports while, for both exports and imports, the rest of Asia—principally South Korea, India, Taiwan and the ASEAN group—now accounts for a larger share of Australia’s trade than China,” economics writer David Uren said in a commentary on the Australian Strategic Policy Institute (ASPI) in 2022.

In a joint statement signed by the foreign affairs, trade and agriculture ministers, Mr. Albanese said his government remained committed to trade diversification.

“The government will continue to support Australian businesses to sell their world-class products on the global stage,” he said.

Nina Nguyen contributed to this report.