Australia is aiming to hold a separate dialogue with China to resolve the ongoing wine dispute. This move rejects China’s suggestion of linking the wine issue with other trade matters. Recently, China removed tariffs on Australian barley, giving hope for a potential easing of wine tariffs that have hit Australia’s wine exports since 2021.
Relations between Australia and China soured in 2020 when Australia called for an inquiry into COVID-19’s origins. In response, China imposed trade restrictions that negatively affected Australia’s export-dependent economy. China proposed a “packaged solution,” tying the wine dispute to other trade issues, such as duties on Australian imports of Chinese railway wheels, wind towers, and stainless steel sinks.
Australia’s Agriculture Minister Murray Watt asserts that the wine dispute and other trade matters are entirely separate. The Australian government prefers to resolve the wine dispute through dialogue, similar to how they resolved the barley dispute. Australia is also committed to pursuing its case at the World Trade Organization (WTO) regarding both the wine and steel disputes.
Before COVID-19, China was Australia’s primary wine export market, reaching a peak of A$1.2 billion for the 12 months to January 2020. However, by June, wine exports to China had plummeted to A$8.1 million due to the ongoing dispute.
