Wine producers in Australia are increasingly optimistic that China’s crippling import tariffs will soon be lifted after similar measures against barley shipments were abandoned.
The Beijing government has announced that it will remove 80.5% anti-dumping and countervailing duties on imports of Australian barley from tomorrow [5 August] – and now senior Australian politicians are keen to see a similar reprieve for the country’s wine industry.
China imposed tariffs of 107.1-212.1% on Australian wine imports in November 2020, raising them to 116.2-218.4% four months later, with the precise duty rate varying by company.
The measures effectively shut off Australian wine’s most lucrative export destination, worth more than AUD1bn [US$657m] a year.
Before the tariffs, China accounted for nearly 40% of the global revenues of the high-end Bin and Icon range produced by Treasury Wine Estates’ [TWE] Penfolds brand, and was the source of 30% of TWE’s group earnings.
In a joint statement, Australia’s Trade Minister Don Farrell, Foreign Minister Penny Wong and Agriculture Minister Murray Watt welcomed the elimination of the barley tariffs, adding that they expected “a similar process to be followed to remove the duties on Australian wine”.
The barley tariffs were lifted after Australia agreed in April to temporarily suspend a WTO dispute with China over the issue, while Beijing conducted an “expedited review” of the tariffs.
Farrell later told ABC in an interview: “Look, we believe we’ve got a very strong case, just as we had with barley, to get the WTO to lift the very high tariffs on Australian wine.
“I’m hoping the template that we’ve used here, namely to suspend our case and give the Chinese government a chance to reconsider the tariffs, will be the template that will work to ensure that fantastic Australian wine gets back on the tables of Chinese consumers.”
China said it had imposed the tariffs because the Australian government was “dumping” wine on the market, as well as unfairly subsidising its wine industry.
However, the measures are widely thought to have been sparked by political tensions between Beijing and the previous Australian government under Scott Morrison, who called for an international investigation into the origins of the Covid-19 pandemic.
Australia’s wine industry has endured a difficult time since the tariffs were imposed, with exports falling by 10% to AUD1.87bn in the year to the end of June.
Producers have warned that, even if the tariffs are lifted, it could take years for the industry to rebuild momentum in the Chinese market.
