China cancels tariffs on wine from Australia as bilateral relations improve
Winemakers eager to reclaim lost market share
Published: Mar 28, 2024 09:24 PM
Bottles of Australian wine on the shelf of a supermarket in Hangzhou, East China's Zhejiang Province on November 27, 2020 Photo: VCG

Bottles of Australian wine on the shelf of a supermarket in Hangzhou, East China's Zhejiang Province on November 27, 2020 Photo: VCG

China's Ministry of Commerce (MOFCOM) announced on Thursday a decision to cancel anti-dumping and anti-subsidy tariffs levied on Australian wine, effective on Friday.

The removal of the tariffs shows a pragmatic attitude on both sides to solve their trade disputes through dialogue and negotiations, Chinese experts said, anticipating more robust development in trade and economic relations between the two countries.

On November 30, 2023, the MOFCOM, in response to an application by Australian Grape & Wine, launched a review investigation of the anti-dumping and anti-subsidy duties on Australian wine in accordance with the law.

"In light of the changing market conditions in China's wine industry, anti-dumping and countervailing duties on imported wines from Australia will no longer be imposed," He Yadong, a spokesperson of the MOFCOM, said on Thursday.

China and Australia are important trading partners, and China looks forward to working with Australia to address mutual concerns and promote stable and healthy bilateral trade relations, He said.

China implemented a five-year anti-dumping tariff on imported wine from Australia starting March 28, 2021.

The Australian government welcomed the decision, saying in a statement that the tariffs were lifted at a "critical time for the Australian wine industry", the Associated Press reported.

Australian wine company Treasury Wine Estates (TWE) told the Global Times on Thursday that it welcomes the removal of the tariffs and will expand sales and marketing resources "effective immediately."

"Today's announcement is a significant positive not only for Treasury Wine Estates, but also for the Australian wine industry and wine consumers in China," TWE CEO Tim Ford told the Global Times in a statement.

Guy Adams, the fifth generation owner of Australian vineyard Metala Wines told the Global Times on Thursday that the news is a "great outcome" and his vineyard is ready to resume exports to China.

"We've been in constant communication with our customers (in China) so we are hopeful that we can make a successful return to the market soon with our wines," Adams said.

The resolution of the trade dispute showed that both countries are making efforts to address mutual concerns through candid and constructive dialogue and consultation, Chen Hong, director of the Australian Studies Center of East China Normal University, told the Global Times on Thursday.

The MOFCOM conducted the review, which lasted for several months, and now it came to this decision to ending the duties based on facts, Chen said.

Chen mentioned that the removal of the tariffs would greatly benefit the Australian wine industry, as it was the largest source of wine imports in China before the tariff was implemented.

According to industry data, Australian wine accounted for 35.54 percent of China's wine market in 2019, surpassing France and holding the largest market share, before losing market share after the imposition of anti-dumping tariffs and soured bilateral relations.

France, Chile, Italy, Spain and the US were the five largest wine exporters to China last year, according to the General Administration of Customs.

Economic and trade relations between China and Australia are on an upward trajectory and moving toward further development, as long as Australia avoids politicization of trade issues, Chen said.

With the same pragmatic attitude, both sides could solve other trade issues, including Australian lobster imports to China, and they could explore more cooperation frontiers such as clean energy and digitalization, Chen noted.

In another development, a WTO panel on Tuesday said that Australia's anti-dumping measures on Chinese railway wheels, wind towers and stainless steel sinks are in violation of the WTO rules.

China welcomes the WTO panel's "objective and fair ruling" and hoped that Australia can meet China halfway to jointly safeguard the multilateral trade system and boost the healthy development of China-Australia economic and trade relations, the MOFCOM said.

Australian Trade Minister Don Farrell said in a statement on Wednesday that Canberra accepts the ruling of the WTO panel. "Australia will engage with China and take steps to implement the panel's findings," Farrell said.

China lodged the complaint to the WTO in June 2021 amid a downturn in bilateral relations during the previous Morrison government.

Since taking office in 2022, the current Albanese government has remedied its predecessor's irrational anti-China policies, prompting a positive response from Beijing. Hence, bilateral ties have bottomed out and stabilized.

Exports of Australian coal, barley, and cotton to China gained momentum last year, leading to a marked growth in bilateral trade.

Bilateral trade maintained strong momentum last year, as widely expected, with year-on-year growth of 9.8 percent in yuan terms, according to data released by Chinese customs.