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New Chinese and Australia free trade agreement could benefit the wine trade

Published:  19 June, 2015

A landmark trade could help to increase exports of Australian wine to China.

The Chinese-Australia Free Trade Agreement (ChFTA) was signed this week and immediately makes 85% of Australian goods being shipped to China tariff-free. That figure will rise to 95% once ChFTA is fully implemented within four years.

In a joint statement Australian prime minister Tony Abbot and trade and invesment minister Andrew Robb, said ChAFTA enables Australia's agriculture sector "to capitalise on its well-deserved reputation as a clean, green producer of premium food and beverage products."

The trade discussions launched in 2005 and a declaration of intent was finally signed in November of last year between the two countries.

Willa Yang, Wine Australia's regional manager for China, said: "China has been the fastest growing export market for Australian wine for several years."  

Two years ago the crackdown on Chinese gift giving hit the Australian wine market hard and "contributed to an 8% decline of Australian bottled exports" according to the trade body.

"However, in 2014 total Australian wine exports to China increased by 8% to 40 million litres valued at AUD$224 million - a stark turnaround from a year earlier," said Yang.

Australian wine already has a strong presence in China accounting for 18% of the value and 12.6% of the total volume of bottled imports in 2014. Following the free trade agreement and the growing significance of the Chinese market, Australian wine producers may see an increase in trade in the future.

According to the ministerial statement it is "a historic trifecta of trade agreements" for Australia as it now has tariff-free agreements with its top three export markets - China, Korea and Japan, covering "more than 55% of our total goods and services exports".

The trade agreements that Australia has with Korea and Japan, which are only a few months old, have already "increased exports compared to a year ago", including a boost to wine sales.