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Breakthrough on wine dispute ahead of PM's China visit

Australia has reached an agreement with China to suspend their wine tariffs dispute as Anthony Albanese prepares to travel to the Asian superpower within weeks.

Australia’s Prime Minister Anthony Albanese meets China’s President Xi Jinping. Image AAP

A breakthrough deal struck between China and Canberra could end tariffs on Australian wine exports worth $1.2 billion.

Prime Minister Anthony Albanese said the two nations have agreed to suspend their World Trade Organisation spat while Beijing undertakes an "expedited review" of duties.

If the sanctions are not removed at the end of the five-month review, Australia will take up the dispute again.

"We're very confident that this will result in, once again, Australian wine - a great product - being able to go to China free of the tariffs which have been imposed," Mr Albanese told reporters on Sunday.

"One in four of Australia's jobs depend upon trade and our most significant trading partner in terms of our exports is China, which is larger than our next three partners - South Korea, Japan and the United States - combined.

"So this is an important relationship."

Mr Albanese said the decision was particularly significant for Australian grape growers who have found it harder than other industries to diversify their customers since the tariffs were imposed.

The announcement came as the prime minister confirmed he'll visit China from November 4 to 7.

Beijing slapped trade sanctions on $20 billion worth of Australian products at the height of a diplomatic feud in 2020.

A report was handed down by the WTO into Australia's complaint about Beijing's tariffs, and is understood to have been given to both sides.

Following Mr Albanese's announcement, China's commerce ministry said it had reached a deal with Australia on a "proper settlement" of WTO disputes over wine and wind towers.

China is willing to work with the Australian side to meet each other halfway through dialogue and consultation, the ministry said, and promote the stable and healthy development of bilateral economic and trade relations.

China's ambassador to Australia Xiao Qian just days earlier said he was "optimistic" the trade dispute would be positively resolved in the "coming weeks or months".

Australian Grape and Wine chief executive Lee McLean described the breakthrough as a "really positive step".

"The diversification effort needs to continue ... but we absolutely also need to look at opportunities in China as well," he told AAP.

"It's one market that is going to be important to us."

Opposition foreign affairs spokesman Simon Birmingham said the tariffs were never justified and amounted to economic coercion.

"I am confident that draft report would have found that these tariffs were an act against the rules of the WTO, they are clearly in breach of the China-Australia Free Trade Agreement ... and so they should not just be reviewed, but they should be removed," he told ABC's Insiders.

Mr McLean said Australian wine exports to China at their peak were valued at $1.2 billion before the tariffs. But as of June, that figure had plunged to $8 million.

South Australian Premier Peter Malinauskas said his government had "genuine and honest" discussions with Beijing about the importance of the trade dispute for his state during his visit in September.

Mr Albanese will meet with President Xi Jinping and Premier Li Qiang in Beijing, in addition to attending the China International Import Expo in Shanghai.

The pair will also discuss a potential reciprocal visit by President Xi.

It will be the first visit to China by an Australian prime minister since 2016.

The trip will mark the 50th anniversary of the first visit to China by then prime minister Gough Whitlam in 1973.

Relations have steadily thawed since the Albanese government came to power, with China lifting tariffs on Australian barley in August.

The latest breakthrough comes after China earlier in October freed Australian journalist Cheng Lei, who had been detained in Beijing for three years after being accused of national security-related offences.

Mr Albanese denied the deal had been achieved as part of a "transactional" arrangement, saying that Australia has engaged with China on a range of issues. 

Beijing had reportedly been demanding Australia drop its anti-dumping tariffs on Chinese steel as part of a quid pro quo package deal.


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