Trade and Market Access
Alcoholic Beverages Standard Amendment
On 18 December 2020, India notified the Food Safety and Standards (Alcoholic Beverages) First Amendment Regulations, 2020. The changes made in this Amendment to the Alcoholic Beverages Standard sought to address Australia and other countries concerns regarding water addition, amongst other elements. While the regulations have improved with India seeking to mimic Australia’s water addition regulations in the Australian Food Standards Code, there remains some ambiguity around the 7% cap and its applicability to all permitted uses. In Australian regulations, high sugar must addition is not included as part of the 7% cap, however in the Indian regulation it appears to be incorporated into the total.
In addition, the drafting within the amendment has created ambiguity around labelling of vintage, variety and geographic origin. These are currently voluntary, however, the amendment contains certain wording which could be interpreted as them now being mandatory.
Australian Grape & Wine is working with Wine Australia and a local Agricultural Counsellor in Delhi to seek an interpretation from FSSAI on both issues, in the interests of the Australian wine sector.
Forging Facility Registration and Inspection
On 25 November 2020, Food Safety and Standards Authority of India (FSSAI) notified the WTO Technical Barriers to Trade (TBT) Committee (G/TBT/N/IND/180) of an Amendment to the Food and Safety Standards (Food Import) Regulations 2017.
FSSAI’s stated objective of the amendment is to propose registration inspection or audit of Foreign Food manufacturing facilities producing such food products for export to India, for which, time to time risk has been identified by the Food Safety and Standards Authority of India. The regulation does not distinguish between different products within the standard but would be of concern if the strict elements of facility inspection and registration were applied to a low risk product such as wine.
Australian Grape & Wine have provided comments to the Australian Government to raise at the World Trade Organization (WTO) addressing concerns around the applicability of this regulation to low risk foods such as wine. The EU, US and New Zealand wine industries were also contacted and have made approaches to their governments to raise comments at the WTO TBT Committee.
As previously reported, in September 2019 the Korean Ministry of Environment notified the WTO TBT Committee (G/TBT/N/KOR/857) of several proposed amendments to the Act on the Promotion of Saving and Recycling of Resources. The amendment proposes elements of mandatory recycling labelling, and a recycling levy based on the ease of recyclability of packaging materials.
In early 2020, it was confirmed, following a number of interventions at the WTO, that South Korea had allowed wine bottles, and whisky bottles to be excluded from the ‘difficult to recycle’ labelling requirements under the new regulation. Australian Grape & Wine has since been seeking clarification on whether this exemption would also apply to the recycling levy.
In January 2021, the Australian Government received a response from South Korea effectively denying the request for the wine bottle exemption to extend to the recycling levy. To further complicate this issue, we have received reports from an Australian producer who is being scrutinised by Korean authorities for the use of PVDC (a food grade waterproofing polymer used in the wadding of caps) in relation to this regulation. Under the regulation, if one part of the products packing is considered “difficult to recycle”, the whole product is considered difficult therefore making it liable for mandatory labelling and the recycling levies.
Australian Grape & Wine is continuing to work with the Australian Government and international colleagues to seek a resolution and clarification on the applicability of the regulation to wine packaging.
European Union (EU)
Australia-EU Free Trade Agreement Negotiations
The nineth round of negotiations of the Australia-European Union (EU) Free Trade Agreement (FTA) was held via video conference over 30 November – 11 December 2020. We understand that during this round there was little change to the positions held from previous rounds on the contentious priority issues as they relate to wine.
In terms of specific points of note for wine:
- No further Market Access offers were exchanged during this round but agreement was reached to discuss a second round of revised Market Access offers in round ten.
- The scope of a Competition and Subsidies section was discussed including how to deal with subsidies which do not lead to a distortion in the market, as well as transparency.
- On GIs, discussions focused on finding ways forward on issues raised by Australian stakeholders during the Australian public objections process in 2019, Australia holding the line that it will not agree to protect EU GI terms unless the overall deal is in Australia’s interests.
- Wine Agreement – Australia has continued to hold the line that the Wine Agreement should not be incorporated into the FTA, which is the EU’s preference. Further progress is being made outside the FTA on efforts to engage the EU on meaningful dialogue via the Joint Management Committee.
- Sustainability – the Parties discussed multilateral labour standards, multilateral environmental agreements, trade and biodiversity, climate change and a number of other issues. The EU has continued to drive its Sustainability agenda and is undertaking webinars in Australia highlighting the importance of climate change resilience during January 2021.
- Both parties remain confident of completion of the FTA in 2021.
The tenth round of Australia-EU FTA negotiations is planned for 9-19 March 2021.
The EU continues to progress its strong focus on sustainability priorities as a core pillar of its work. The EU is now progressing a number of policies under its ‘Green Deal’ with potential global trade implications. These include product environmental footprint, a GI regulatory review, carbon boarder adjustments (a tax on imports) and continued pressure to limit agrochemical use.
United Kingdom (UK)
Australia UK Free Trade Agreement
The third round of negotiations on the Australia-UK Free Trade Agreement was held virtually from 23 November to 4 December 2020.
The negotiation round included:
- Progress on negotiation and agreement of Chapter text trade in goods, Rules of Origin and Technical Barriers to Trade.
- Both parties are aware of the key issues as they relate to wine. The key to the subsequent rounds will be agreement on a position related to the roll over wine agreement, mechanisms for reviewing technical barriers for trade and how this will be reflected in the FTA.
- A session was held on GIs where the UK outlined its intentions for a post-Brexit GIs system.
The fourth round of negotiations is scheduled for 22 February to 5 March 2021.
Australian Grape & Wine would like to congratulate Wines of King Valley and the North East Victorian Wine Zone on a successful project application that Australian Grape and Wine has supported to aid the sectors ability to manage the impacts of smoke. With State, federal, and in-kind industry support the project will deliver a world first smoke sensor network across the region that will inform business decision making when vines are impacted by smoke, with future potential to be expanded nationally.