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China's commerce ministry recommends dropping tariffs on Australian wine

Australian winemakers' years-long freezeout from the lucrative Chinese market will soon be over if Beijing follows through on a recommendation from a key Chinese ministry.
It's been more than 3.5 years since the $1.2 billion export trade collapsed when China imposed staggering wine import taxes among a range of trade penalties launched in part as a reaction to Australia's call for an inquiry into the origins of COVID-19.
But relations thawed with the arrival of the Albanese government and tariffs on coal, beef barley and cotton dropped one by one.
Australian winemakers' years-long freezeout from the lucrative Chinese market will soon be over, if Beijing follows through on a recommendation from a key Chinese ministry. (Getty)
China agreed to review the 218 per cent wine tariff in October – ahead of meetings between Prime Minister Anthony Albanese, President Xi Jinping and Premier Li Qiang in China – with a decision to be announced this month.
Treasury Wine Estates, the ASX-listed company behind Penfolds and other big brands, yesterday said the Chinese Ministry of Commerce (MOFCOM) had advised it of an "interim draft determination" proposing the removal of the tariff.
"TWE anticipates that MOFCOM will release a final determination in the coming weeks," it said, in an announcement to the stock market predicting only a "minimal" effect on the company this financial year.
Australian Trade Minister Don Farrell said the interim recommendation was a "welcome development".
"It vindicates the government's preferred approach of resolving trade issues through dialogue rather than disputation," he said, in a statement issued to some media outlets last night.
Australian wine exports to China have collapsed after Beijing imposed hefty tariffs. (AP)
Foreign Minister Penny Wong said she would keep pushing for "all remaining trade impediments to be removed".
When the tariffs were first imposed, China was worth $1.2 billion a year to Australia's winemakers, more than exports to the next two biggest markets – the UK and US – combined.
Last year, wine exports to mainland China clocked in at just $8.1 million, 27 times less than exports to Hong Kong and less even than to the Chinese special administrative region of Macau, which has less than 1 million residents.
"That's an enormous drop for any industry to go through and quite an economic shock," Australian Grape and Wine Chief Executive Lee McLean told 9News last month.
He didn't expect exports to bounce straight back and warned it would take years for businesses to work through years of grape oversupply.
About 40 per cent of Australia's wines are drunk locally, with the rest sent overseas.
If the wine recommendation is accepted, the government will be able to focus solely on the lobster issue, where Farrell said progress was being made.
"I got an understanding from the Chinese authorities that they are reviewing the issue of our lobster coming into China," he told Sky news at the weekend.
"Everything is heading in the right direction."
China remains Australia's largest trading partner, amounting to almost a third of total trade.
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