Trade & Market Access – May 2021

Market Diversification

There have been a number of support packages and resourcing announced in recent months at both the State and Federal level to support the sectors’ market diversification efforts.

These include:

• Australian Federal Government Agribusiness Expansion Initiate (ABEI) $72.7 million
• Wine Australia platforms and programs using industry levies
• State Government supports – Announced by South Australia, New South Wales, Western Australia and Victorian Governments

The initiatives vary across a range of business supports, in-market activity, marketing promotion and trade and market access.

Australian Grape & Wine is currently in the process of applying for additional resources under the ABEI to enable further resourcing of industry activities in marketing and promotion and trade and market access in the short terms and the development of an overarching framework for prioritisation and coordination of market diversification efforts in the long term.

We would encourage all grape and wine producers seeking to diversify and expand their export markets to seek information on their state-based funding opportunities, and the resourcing that has been made available by Wine Australia and the ABEI nationally. 

More information will be provided as these programs are progressed.

United Kingdom

The fourth round of Australia-UK FTA negotiations took place during February and March, concluding on 5 March 2021. The key areas for wine remain:

• Treatment of the Aus-UK Wine Agreements and wine re-exported to Europe
• Wine tariffs
• VI1 Certificates
• Allowable oenological practices
• Rules of origin
• Protection of Geographic Indications

The remaining complexities for wine negotiations under this FTA continue to center on allowable practices and treatment of bulk wine between UK and EU, certification, and triangular trade issues.  Australian Grape & Wine is working with Wine Australia, our UK counterparts, and major exporters to the UK to seek resolutions to these issues through the FTA negotiations and Aus-UK Wine Agreement.

European Union (EU)

EU Free Trade Agreement Negotiations

The tenth round of the Australia EU Free Trade Agreement (FTA) negotiations concluded on 19 March 2021. At the time of writing, specific detail on the progress made during this round was not yet available.

The parties continue to hold ongoing discussion both within and outside the FTA on the terms and application of the Wine Agreement. Australia is maintaining its current position that the Wine Agreement should continue outside the FTA in its current form. This point of contention has not prevented further negotiations between Australia and the EU via their Joint Management Committee on reviewing content of the Wine Agreement. Australian Grape & Wine Cheif Executive, Tony Battaglene, has been engaged in these negotiations as an Australian Industry expert supporting the discussions. The Wine Agreement discussions are pivotal to ensuring the Australian Wine sector benefits from the FTA on technical aspects of wine.

While Geographic Indications (GIs) have been less spoken about publicly in context of the FTA, they remain an ongoing and contentious aspect without a clear resolution. Australia is continuing to consider how it could apply a GI regime for all food and the complexity of how the existing wine GI system may be treated.

Since the start of these negotiations, the EU has consistently regarded the Wine Equalisation Tax (WET) rebate as a subsidy. We are now aware that the EU’s intended position on WET will be to seek access for its producers to the WET rebate.

Policy and Regulatory updates

The EU has continued to announce a number of high level strategic and policy positions with potential implications for wine:

• The EU is progressing the implementation of its Carbon Border Adjustment (CBA) mechanisms under the EU Green Deal. Recently the EU’s Environment Committee adopted a resolution backing the CBA and saying it should be implemented and in place by 2023. Further details on the CBA mechanisms are expected by June 2021. With the UK and US also highly invested in addressing climate change under the Biden Administration, Australia is at real risk of major trade disadvantages under such policies.
• The EU has recently announced further information regarding “Europe’s Beating Cancer Plan” with a strong focus on the prevention of harmful alcohol consumption.
• Under the EUs Farm 2 Fork Strategy they have implemented two public consultations of relevance to wine:
• The Review of Sustainable Use of Pesticides Directive (SUD) launched in January 2021 will address the limited effectiveness of the SUD in reducing pesticide use and potential risks to human health and the environment across Member States.
• The Revision of Geographical Indications Legislation which is seeking to strengthen and further extend the scope of protection for European GIs.