China was the largest destination for Australian bottled wine before the sanctions were imposed. - AFP
BEIJING: China said Thursday (March 28) it would lift punitive tariffs on Australian wine, reopening a billion-dollar market as ties improve between the two countries after years of tension.
Canberra swiftly responded by dropping its case against Beijing at the World Trade Organization, welcoming an end to sanctions that had plunged many Australian winemakers into crisis.
Duties were imposed on key Australian exports such as wine, barley and beef in 2020 after Canberra legislated against overseas influence, barred Chinese telecom giant Huawei from 5G contracts and called for a probe into the origins of the Covid-19 pandemic.
China was the largest destination for Australian bottled wine before the sanctions were imposed, accounting for 33 percent of export revenue in 2020, data from the Australian government shows.
But trade restrictions have tapered since Australia's centre-left government was elected in 2022 and adopted a less confrontational approach.
Beijing's commerce ministry said the lifting of what it called "anti-dumping duties and anti-subsidy duties" on wines from Australia was due to "changes in the market situation of the relevant wines in China".
They will be lifted on Friday, it said.
Tariffs and barriers have already been removed from commodities including Australian coal, timber and barley.
The foreign ministers of both countries also met this month in another sign tensions were easing.
"The re-entry of Australian bottled wine into the Chinese market will benefit both Australian producers and Chinese consumers," Australian Prime Minister Anthony Albanese, Foreign Minister Penny Wong and Trade Minister Don Farrell said in a statement Thursday.
"The removal of duties means that Australia will discontinue its legal proceedings at the World Trade Organization," they said.
Canberra will continue to lobby for the removal of remaining trade restrictions, including on rock lobsters and beef from some abattoirs, they said.
The tariffs added up to 200 per cent to the cost of Australian wine shipped to China and effectively halted trade worth US$1 billion a year.
Australian winemakers responded by turning to other Asian markets, including Hong Kong and Thailand.
Melbourne-based Treasury Wine Estates chief executive Tim Ford said the announcement was a positive step for the Australian wine industry and wine consumers in China.
He said the company, which owns luxury wine brand Penfolds, looked forward to reestablishing its foothold in the China market.
And in Beijing, wine shop owner Yang Jie told AFP he welcomed the "good news".
Australian red wines had previously been his "main product" due to its popularity with Chinese drinkers, he said.
"But they have been out of stock for a year or two," he said.
"After the opening, we can put these red wines back on the shelves."
Beijing said following the move it was "willing to continue to strengthen dialogue and cooperation with Australia".
But, while bilateral trade has made some recovery, the two countries remain at odds in strategic areas.
Australia expressed "outrage" last month after Beijing handed a suspended death sentence to Chinese-Australian dissident writer Yang Jun.
Australia and its allies are also seeking to parry China's expanding reach in the South Pacific.
Canberra and Washington were jolted into action after Beijing signed a secretive security deal with Solomon Islands in 2022.
Australia also supports the United States and some Asian countries in opposing Beijing's sovereignty claims over the South China Sea. - AFP
