Almost free trade | Wine from Australia still faces a tariff in China

By Jim Boyce | I’ve heard quite a few people state that bottled wine from Australia no longer faces a tariff when it’s imported into China due to the free trade deal—CHAFTA—signed between the two countries last year. Not so. Yes, a free trade deal was signed, but it didn’t immediately eliminate all tariffs in terms of wine.

For sparkling wine and still wine of under two liters per unit, the regular tariff of 14 percent was reduced to 11.2 percent last December 20 and further cut to 8.4 percent on January 1 of this year. It will be further reduced on January 1 of each of the next three years, first to 5.6 percent in 2017, then to 2.8 percent in 2018 and finally to 0 percent in 2019. Also of note, those wines still face a value-added tax and a consumption tax, both of which are higher than the tariff, so the advantage vis-a-vis other countries is less impressive than it might seem.

In any case, the declining tariff comes at a time when Australia wine finds itself in a healthy situation in China. Not only is Australia the second-largest source of bottled still wine but, of the top six countries that account for about 90 percent of imports, including France, Spain, Chile, Australia and The United States, it easily has the highest value per bottle. See more details of Australia’s value and volume situation here.

Here’s the schedule for the tariffs. For more details, click here.

australia china free trade agreement chafta wine tariff

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