Free Trade Agreements (FTAs) are a major contributor to improving export market access and removing barriers to trade. These are now more important than ever with the Australian grape and wine sector’s continued prioritised efforts to grow and diversify our export markets. We take a look at the status of some key FTAs that will influence Australian wine trade:
Australia – European Union (EU) FTA
Having commenced in June 2018, this long running FTA negotiation is now seemingly moving towards a conclusion. The Australian Government has recently advised that expected timelines for completion of these negotiations could be around mid 2023, however it is more likely to be toward the end of the 2023.
The last (12th) round of negotiations were held virtually between 7-18 February 2022. This round saw progress made in a number of areas including government procurement, a second round of market access offers and progression across a number of chapter texts. For wine, relevant ongoing discussions include the treatment of the Wine Agreement and Geographic Indications. Separate ongoing discussions on technical aspects of wine will also continue to be progressed through the Joint Standing Committee established under the current Wine Agreement with the EU.
We have recently had briefings from Australia’s senior FTA negotiators and are planning further engagement on a number of specific elements such as GIs. With the end in sight, Australian Grape & Wine will continue to ramp up its engagement on some of the key issues in the coming months and will continue to advocate on behalf of the sector to ensure that outcomes are comprehensive and provide genuine benefit to the sector.
Australia-United Kingdom (UK) FTA
Signed on 7 December 2021, this agreement is yet to enter into force as it awaits ratification by Australia and UK parliaments. Both the Australian federal election (May 2022) and the current UK leadership spill have slowed the ratification process’ required for this agreement to enter into force. Despite this, with the resumption of our parliament last month, the Australian Government has committed to re-establishing the Joint Standing Committee on Treaties, which plays a key role in Australia’s FTA ratification process. We expect the ratification of this FTA to be completed by the end of 2022.
For wine, the Agreement will see the elimination of import tariffs on entry into force. This creates a level playing field for Australia’s wine exports with our major competitors from Continental Europe. Wine Australia has estimated that the tariff elimination represents a saving of approximately AUD $43million per year for the Australian wine sector.
India-Australia Economic Cooperation and Trade Agreement (IA-ECTA)
As noted in previous updates, Australian Grape & Wine is continuing to work with the Indian Government and Industry on a number of initiatives aimed at improving trade with India. These efforts are building on the initial outcomes of the India-Australia Economic Cooperation and Trade Agreement (IA-ECTA). Like the UK Agreement, IA-ECTA has been signed and is awaiting ratification by the Australian and Indian Parliament before it can enter into force. With Australia’s recent resumption of parliament following the election, IA-ECTA is expected to be ratified by the end of 2022.
An interesting side note: recent media reports are suggesting India and the United Kingdom are within weeks of concluding their free trade agreement also. Reports are also suggesting negotiations are expected to be concluded by the end of August 2022. The outcomes of these negotiations are of little consequence to Australia, however there is potential for them to be of interest for wine. If by some slim chance the UK negotiates a better deal than Australia in terms of wine tariffs, Australian wine will also receive the same treatment due to our agreement to get “Most Favoured Nation” treatment for Australian wine under our own FTA with India. While this is unlikely, we will watch on with anticipation and interest.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
With the CPTPP in force, Australian Grape & Wine is currently working with the Australian Government on some opportunities to work collaboratively with CPTPP partners to remove a number of technical barriers to trade under provisions of the agreement.
New Zealand – EU FTA
The FTA between NZ and EU was signed recently and does provide some insight into the types of items the EU will prioritise in our own FTA negotiations. Unfortunately, it also presented some less than favourable outcomes that will likely impact our sector. A summary of these outcomes was provided as part of our previous update here.