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  • Writer's pictureFlow Australia

Olive branch extended to China for wine tax sour grapes

Australia has offered to suspend its World Trade Organisation wine dispute against China in return for a review of the tariffs in the hope they'll be removed.

Trade Minister Don Farrell has officially proposed suspending Australia's wine complaint against China in exchange for a review on punitive tariffs, but is yet to hear back.

Senator Farrell says he's hoping to have the dispute resolved after his Chinese counterpart Wang Wentao accepted his invitation to visit Australia and the Clare Valley wine region in South Australia.

While Mr Wang accepted the invitation, a date is yet to be set and the minister is hopeful the visit will happen by the end of the year.

Australia suspended its World Trade Organisation barley dispute in exchange for China reviewing the tariffs, which it then dropped.

The same offer has been made for wine.

Australia maintained any action would be reinstated should China fail to remove the trade barriers.

"We've made it clear all along that we saw the barley dispute resolution as the template for wine," Senator Farrell told AAP.

"We haven't had a response yet to that offer."

Senator Farrell said the fact the value of barley had jumped from $300 to $370 a tonne after the trade barriers came down showed the value of the Chinese market.

The impact of Chinese trade bans have dropped from $20 billion to $2.5 billion as the diplomatic relationship improved and tariffs and embargoes on Australian products were lifted.

The WTO report into barley was never released publicly after both parties reached an agreement. 

The government insisted it showed Australia was well placed to have a ruling in its favour.

Australia and China are expected to receive the organisation's report into the wine dispute in October and would have a number of weeks to settle before the findings are given to other member nations. 

A similar timeline to barley would mean a Chinese review of the wine tariffs would start around November and wrap up in the first quarter of next year.

Prime Minister Anthony Albanese has also accepted an invitation to visit China, with speculation he will travel before the end of the year. 

Mr Albanese, who is in Indonesia to outline a new Southeast Asia trade strategy, said Australia's economic security was linked to its national security as he spoke about the need for diversification.

"There's a complete link between the economy and economic relations and national security and that's why this report is being considered by ... the national security committee of cabinet," he said.

Shadow treasurer Angus Taylor said it was understandable but still a concern that Australian exports skewed more towards China over time. 

He said it was important to build a respectful relationship with China but maintaining a line in the sand was necessary.


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