China has begun dismantling the last major trade sanction against Australian exporters after agreeing to review punitive wine tariffs, clearing the way for the first visit to Beijing by an Australian prime minister since 2016. Prime Minister Anthony Albanese announced the deal for the five-month wine review ahead of his upcoming trip.
The PM will travel to the People’s Republic of China from 04 to 07 November, where he will meet with President Xi Jinping and Premier Li Qiang. He will also attend the China International Import Expo in Shanghai at Mr Li’s invitation. Mr Albanese said the leaders would discuss “economic links, climate change and links between our people.”
Australian wine exports to China were previously hit with tariffs of up to 220% in November 2020 after relations deteriorated. Under the deal, China has agreed to launch a five-month review into the tariffs. In return, Australia has agreed to suspend action against China in the World Trade Organization, pending the outcome of the review.
China has progressively backed down on trade sanctions against $20 billion of exports unleashed as a sign of its displeasure with the former Australian government. This included $1.2 billion of Australian wine exports that were crippled by punitive tariffs.
Australia’s ABC media has said that the “return to China is no silver bullet.” The president of the Riverina Winemakers Association, Andrew Calabria, is cautiously optimistic about re-entry to the Chinese market. “Things have changed during that COVID period. The economy isn’t doing as well in China either, and not as many people have that cash,” he said in an interview with the ABC.
“We’re going to welcome any change to the tariffs but also are very cautious that consumption is probably lower for wine, and it’s not necessarily going to be that $1.2 billion worth of value that we had before.”
Federal Minister Murray Watt said at his press conference on 23 October:
“Obviously this was very good news over the weekend to hear that China is now going to review the wine tariff that it has in place on Australian wine. But it is also important that we learn from that experience that we can’t put all of our eggs in one basket when it comes to our trading partners. We do need to build up other markets and that’s what Australian producers have been doing over the last couple of years with support from the Federal Government.”
With a pathway for removing the wine tariffs now in place, only de facto bans on lobsters and red meat exports from some abattoirs remain under Chinese sanction. China remains Australia’s largest trading partner, amounting to almost a third of our total trade.
Also see our previous related article: China Meeting to Improve Trade Relations.
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