HAPPY DAYS: AUSSIE WINES PAY ZERO TARIFFS IN CHINA AND KOREA
By David Ma
Australian wine producers pay zero tariffs on their exports to China and Korea from 1 January when further free trade agreement tariff cuts kicked in, adding to their competitive edge over European and American producers.
The latest round of cuts is the fifth tariff cut under Australia’s free trade agreement with China and the sixth with Korea.
It brings the total number of product lines Australians can export without any tariffs to 5418 for the China market and 10,872 for the Korean market.
Under the terms of the China Australian Free Trade Agreement, signed in 2015, tariffs on Australian bottled wines will drop to zero on 1 January 2019. The levy was 2.8% before the latest round of cuts, down from 14% before the agreement was signed.
Australian wine producers now enjoy a further advantage over European and American competitors in the China market, who still face 14% and 28% tariffs respectively.
While Australian wineries had to wait until start of this year for China to drop tariff on their bottled wines to zero, they have been sending wines to Korea tariff-free since their trade deal became effective in 2014.
“China and Korea are two of our largest trading partners, and these tariff reductions will provide a significant boost for Australian businesses looking for export opportunities into these markets,” said Australian Federal Trade Minister Simon Birmingham.
“With Australian goods exports to China already totaling AUD106 billion, this latest round of cuts means Australian exporters have an even greater competitive edge in the Chinese market,” he added.
Since the signing of the free trade deals, Australian wines have done very well in both the Asian markets.
In 2017, China overtook the UK to become Australia’s most valuable export market, export value topped AUD1.04 billion.
In 2016, Australia exported AUD 13.5 million worth of wines to Korea, increased from AUD 8.4 million in 2014. By volume, it increased from 145,000 cases to 260,000 cases over the same period.
(the writer can be contacted at: DavidMa@thewinechronicle.com)
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