The chief executive of Australian Grape and Wine has warned that while news that China has made the interim decision to remove tariffs on Australian wine is welcome, the trade between the two countries will not immediately pick up where it left off.
Australian wine sales to China reached $1.2 billion in annual value at their high point prior to China implementing tariffs on Aussie wine in 2020, ostensibly for dumping, during a period of trade and diplomatic tensions with the former Morrison government that saw a number of Chinese sanctions on Australian agricultural products.
This figure for wines sales has fallen to an estimated $10 million last year, with Australian winemakers unable to economically get product into China with the tariffs, ranging from 169 per cent to 218pc depending on individual calculations, in place.
Lee McLean, AGW's chief executive, said there was cautious optimism the interim move from the Chinese government would be made permanent but cautioned it would not be a simple matter of returning to the halcyon days of huge volumes of sales.
"There has been a lot of commentary about the market previously being worth $1.2 billion annually," Mr McLean said.
"We want to really stress the fact this decision, even if it is made permanently will not just flick a switch and the sales will be back where they were."
"There are some large volumes of supplies to work through to start with and more generally a lot of things have changed in the four years since the tariffs were implemented.
" While our wine makers have remained in close contact with Chinese customers hopeful of the issue being resolved it will take time to build the market back up."
"Globally we've seen a change in wine consumption patterns and China has been a part of that so while this is some very welcome news it is important to note it will not be an overnight solution to the problems the industry faces."
However, he said the industry was pleased with the news and thankful for the work of both parties.
"We appreciate the collaborative efforts from both the Australian and Chinese governments, and industry partners, in working towards a resolution."
Beijing's move comes after protracted trade negotiations between the two countries.
The Chinese government has been reviewing the sanctions through a five month process after the Albanese government agreed to suspend Australia's dispute lodged with the World Trade Organisation until March 31.
On Tuesday it released its interim recommendation that the duties on wine are no longer necessary.
Beijing will announce its final decision later this month, but the move has sparked hope the tariffs will be fully removed.
Foreign Minister Penny Wong said the government had stabilised the relationship with China without compromising the nation's values
"We have delivered on that commitment through calm and consistent dialogue," she said.
"We continue to press for all remaining trade impediments to be removed."
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.
"We appreciate the collaborative efforts from both the Australian and Chinese governments, and industry partners, in working towards a resolution."
The move will leave rock lobster as the last major food and beverage product subject to tariffs, with some individual Australian abattoirs also subject to ongoing sanctions.
China lifted tariffs on Australian barley in August last year following a similar process, after Labor paused a WTO dispute in exchange for a review.
with Tess Ikonomou and Dominic Giannini
