Australia ‘hopeful’ on China wine breakthrough as deadline nears

SYDNEY (Reuters) – Australian Prime Minister Anthony Albanese said on Tuesday he remained “very hopeful of a breakthrough” in a trade dispute with China over wine tariffs, as a deadline for the publication of a World Trade Organization ruling nears.

The complaint over China’s tariffs on Australian wine, which halted a billion-dollar export trade, was lodged at the World Trade Organization (WTO) by Australia in 2021, with a dispute panel extending its investigation a year ago.

“I’m very hopeful of a breakthrough that removes the impediments when it comes to wine,” Albanese told reporters on Tuesday, noting Australia’s wine industry had substantial exports to China before the tariffs were imposed in 2020.

Under the WTO dispute-resolution process, a report is given to each party involved before it is made public three weeks later.

Australia in April suspended its complaint over Chinese barley tariffs at the WTO as a dispute panel was due to report its findings, giving China time to review the 80.5% duties imposed in 2020, which Beijing later removed.

Officials are unable to publicly comment on a WTO report until it is published. Trade Minister Don Farrell said this month that “we’re very confident about that case”.

Australia last month rejected China’s proposal for a “packaged solution” that would tie the wine dispute to those about duties on Australian imports of Chinese steel.

Australia will “continue with that case until such time as we’re satisfied that the Chinese government is prepared to lift their tariffs,” Farrell told Sky News on Oct. 3.

Albanese has said he will visit China this year, the first visit by an Australian leader since 2016. Ties between the major trading partners have warmed since Beijing eased curbs on a raft of Australian exports that were imposed during a diplomatic dispute.

China was Australia’s top wine export market before COVID, peaking at A$1.2 billion ($770 million) for the 12 months to January 2020 when the pandemic hit. In the year to June, they had plunged to A$8.1 million ($5.2 million).

China has lobbied Australia for support to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a free-trade agreement among a dozen countries on the Pacific Rim, which incorporates WTO rules and obligations.