On 24 January 2018, the Australian Government announced the impending signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP or TPP11), which will be finalised by 8 March 2018. The Agreement will then required to be ratified by the member countries before entering into force. The TPP11 is the revised version of the original Trans-Pacific Partnership, which the United States (US) withdrew from in January 2017. Since the US withdrawal, the remaining parties lead by Japan and Australia have sought to ensure an outcome for its remaining 11 participants. The following provides a summary of outcomes for Australian wine exporters:
The key tariff benefits for Australian Wine should be read in conjunction with existing preferential treatment already obtained via bilateral agreements with some of the TPP11 parties.
In summary Australia benefits as follows:
Outcome for Australian Wine
|Brunei||NA – No alcohol sales allowed|
|Canada||Specific tariffs of 1.87 and 4.68 cents/litre (“nuisance tariffs”) eliminated on entry into force.|
|Chile||Existing rate of 6% eliminated on entry into force, however already eliminated in Chile Australia FTA.|
|Japan||Existing rate of 15% will be eliminated in 7 stages, bulk wine already 0% under JAEPA and packaged product will be tariff free by 2021|
|Malaysia||Tariff of between 7 and 23 Malaysian Ringgits per litre (depending on tariff line) eliminated over 15 years. No preferential rate under Malaysia Australia FTA.|
|Mexico||Existing rate of 20% eliminated in 4 stages over 3 years For “premium” wine (> $5 per bottle). 10 year phase out otherwise.|
|New Zealand||Australia NZ existing FTA already eliminated tariff for Australian wine.|
|Peru||Existing rate of 9% eliminated on entry into force (for table wines). Under existing Peru-Australia FTA Tariff will be zero on entry into force.|
|Singapore||NA – There are no tariffs on wine in Singapore (for any trading partner)|
|Vietnam||Existing rates range between 50 and 59% and will be eliminated over 11 years. Previous FTA with between Australia and ASEAN countries (including Vietnam) reduces tariff only to 20% (in 2022)|
WFA is a strong advocate for harmonisation of wine technical requirements in support of trade facilitation. This is of particular importance in emerging markets and countries where wine is not traditionally produced. Technical requirements can sometimes impose additional unnecessary cost or burden in supplying wine. A key means of addressing these technical requirements is the inclusion of technical wine annexes which seek to clarify, streamline, and remove technical barriers. For this reason, WFA has been, and will continue to drive the inclusion of technical wine annexes within all relevant Australian trade agreements.
Chapter 8 of the TPP11 Technical Barriers to Trade includes a Wine and Distilled Spirits Annex (Annex 8-A), which addresses harmonisation of practices and technical requirements across the member countries. The annex will help remove Technical barriers to trade for Austrian wine exporters in regard to:
WFA is working to ensure all relevant future Australian trade agreements include a wine specific annex addressing technical barriers to trade, which go further to liberalise trade of wine.
US withdrawal implications
The US withdrawing from the agreement is not necessarily disappointing for Australian wine as US tariffs on Australian wine (specific rates of 6.3 to 16.9 cents/l) have already been eliminated under Australia’s existing FTA with US since 2015. Furthermore as a competitor in these markets, the US will not receive the benefits that will flow to the wine producing countries, particularly Chile, Canada, New Zealand and Australia. The TPP11 also means we will restore parity with the US in the Mexican market, where the US has the benefit of North American Free Trade Agreement.
The TPP11 Chapter texts and associated documents can be downloaded from the Department of Foreign Affairs and Trade website here:
For more information contact WFA:
Manager, Policy and Market Access
National Wine Centre, Botanic Road, Adelaide, SA 5000
PO Box 2414, Kent Town SA 5071
Tel: +61 8 8133 4308