Positive outcome of China-Australia trade spat likely ‘within weeks’, Beijing says

The Chinese ambassador has signaled that progress is expected “within weeks” on the trade dispute between China and Australia that has seen crippling tariffs imposed on Australia’s wine exports to China. 

According to Bloomberg, Ambassador Xiao Qian, China’s top diplomat to Australia, told reporters in Canberra  that Beijing and Canberra had agreed to engage with each other over the tariffs.

“We’re in that process, and we expect there will be more positive outcomes in the coming likely weeks or months,” Bloomberg reported Xiao saying.

Xiao added that the two countries “will respect each other, [and]…. find solutions to the disputes existing between the two countries,”   The Australian Financial Review reported. 

“There are concerns from [the] Chinese side, there are concerns from the Australian side and we will try to sort out those issues to address the concerns from both sides,” he continued. “We’re in that process, and we expect there will be more positive outcomes in the coming in the weeks or months. But I’m optimistic about the future.”

It comes as Australia’s trade minister Don Farrell announced he would be going to China next month for meetings, with Prime Minister Anthony Albanese also expected to go before the end of the year.

Speaking at the same event, Farrell said he would prefer to resolve the wine stand-off  through bilateral talks rather than through a World Trade Organisation trade dispute.

China’s trade tariffs on wine originally came into effect in November 2020, with 107.1 – 212.1% tariffs initially charged on wine exports (the rates varied by company), which subsequently rose to 116.2 – 218.4% in March 2021. In response, Australia raised a WTO dispute in June 2021, which saw an arbitration panel assembled in March 2022, however, it is not expected to issue its final report before mid-2023 at the earliest.

In the meantime, relations between the two countries have started to thaw. Last November Australian’s premier Anthony Albanese meet Chinese president Xi Jinping – the first time that leaders from the two countries have met in six years –  followed by China lifting its unofficial ban on Australian coal  in January 2023,with bans on timber and beef imports from Australia also expected to be relaxed. The two countries also managed to resolve a dispute over barley this year after Australia dropped its WTO case over barley and the government is said to be hopeful that the wine issues can also be resolved through dialogue.

However, this morning, The Australian Financial Review reported that Beijing is insisting that Australia’s tariffs on Chinese steel products are included as part of the negotiations over the crippling wine tariffs – something that the Australian government reportedly rejected back in September, confirming it would continue to pursue a WTO case against China over crippling wine tariffs,

At the time, the agriculture, forestry’s and fisheries minister Murray Watt said that the government regarded the steel and wine disputes as “entirely separate matters” and would resist the move to lump them together as one dispute.

According to the The Australian Financial Review however, China is “adamant the two issues should be settled together and break what officials are privately describing as an “impasse”,” it reported.

The punitive sanctions contributed to wiping AUD$2.08 billion off the value of Australian wine exports in the year to 30 June 2022.