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Canada Drops Wine War With Australia

Australian wines will be sold in Canada after the two countries put a cork in a long-running trade dispute.

MELBOURNE, Australia — Australia and Canada have put a cork in a long-running trade dispute over wine with restrictions set to be dropped on bottles from Down Under.

Quebec was the last remaining province with the unfair measures, which included putting Australian wines into a “store within a store” in supermarkets while local tipples were on regular shelves.

Under a settlement through the international trade umpire, restrictions will be phased out, allowing Australian products to compete on a level playing field with Canadian drops.

Other restrictions included loopholes, extra taxes, and mark-ups on imported wine.

Australia first challenged the measures in the World Trade Organisation in 2018.

The restrictions affected wine at a federal level and in British Columbia, Ontario, Quebec, and Nova Scotia.

Settlements were reached for every jurisdiction except Quebec between April 2019 and July last year.

Canada is Australia’s fourth-largest export market for wine, worth more than AUD 192 million ($148.41 million).

The industry copped a crushing blow earlier in the year when China — its biggest export market — confirmed punitive tariffs on the commodity for five years.

South Australia, which accounts for 70 percent of exports, has promised to aggressively target markets in Canada, the U.K., and the U.S. to buffer lost sales in China.

Australia has not ruled out taking China to the World Trade Organization, similar to challenging Canada.

South Australia, which accounts for 70 percent of exports, has promised to aggressively target markets in Canada, the U.K., and the U.S. to buffer lost sales in China. (James Ross/AAP Image)

Trade Minister Dan Tehan said the government would continue working within a rules-based trading system to resolve disputes respectfully.

“Our success demonstrates the strength of the World Trade Organization dispute settlement system and underlines why Australia is working to reform the organization to keep it relevant,” he said in a statement.

“Removing these trade barriers will allow Australian winemakers to compete for Canadian customers fairly, and more customers means more sales and more jobs and growth in Australia.

“Australia strongly supports the multilateral rules-based trading system, with the WTO at its core, and we will continue to work within that system to stand up for the rights of Australian exporters while respectfully resolving trade matters,” he said.

Minister for Agriculture, Drought and Emergency Management David Littleproud said the agreement brought to an end the dispute proceedings initiated by Australia.

“Canada is Australia’s fourth-largest export market for wine, worth more than AUD 192 million ($148.3 million) a year, so this is a big win for our wine producers,” Littleproud said.

“This successful outcome will deliver commercially meaningful results for Australian wine producers and is testament to our strong relationship with Canada.

“The agreement addresses our longstanding trade concerns and demonstrates the benefits of the rules-based trading system, and the World Trade Organization dispute settlement system in particular, as a means of resolving disputes between World Trade Organization Members.”

(Edited by Vaibhav Vishwanath Pawar and Ojaswin Kathuria)