Australia hopes for China wine breakthrough as deadline nears

By Kirsty Needham

SYDNEY (Reuters) -Australia’s trade minister will on Wednesday in a speech remind businesses exporting to China of the “significant risks” of over-reliance on one customer, as Canberra seeks to resolve its wine dispute with Beijing through the World Trade Organization (WTO).

Australian Prime Minister Anthony Albanese told reporters on Tuesday he was “very hopeful of a breakthrough” in the dispute with China over wine tariffs, as a deadline for the publication of a WTO ruling is believed to be imminent.

Albanese has said he will visit China this year, the first visit by an Australian leader since 2016, as ties between the major trading partners warm after China blocked trade in a raft of exports during a diplomatic dispute in 2020.

Australia lodged a complaint over China’s tariffs on its wine at the WTO in 2021.

Until the tariffs, China was Australia’s top wine export market, peaking at A$1.2 billion ($770 million) for the 12 months to January 2020.

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

Officials are unable to comment publicly on a WTO report prior to publication.

“Successful businesses know that over-reliance on any single customer comes with significant risks,” Trade Minister Don Farrell will say in a speech, adding that Australia will continue to support its businesses in the Chinese market.

He will tell the Australia-China Business Council in Canberra that Chinese trade impediments remain on around A$2 billion in exports, down from A$20 billion at the height of a diplomatic dispute, and will encourage businesses to diversify markets.

Australia wanted to take the faster path of negotiating an outcome with China on wine, as it did in the barley dispute.

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, and remove the 80.5% duties imposed in 2020.

“We would prefer to resolve all of our trade issues with China through discussion and dialogue rather than through the World Trade Organisation’s dispute settlement system,” Farrell is expected to say, according to excerpts shared with Reuters.

“In the meantime, we will continue to press our case for wine through the WTO,” he will say.

Live lobster and red meat exports to China are also subject to trade barriers.

($1 = 1.5751 Australian dollars)