Australia says wine delays at Chinese ports are ‘irritation’

Steven Ciobo addresses the National Press Club in Canberra

Australia’s trade minister said yesterday that weeks of delays at Chinese ports of Australian wine exports were an “irritation” in a bilateral trade relationship that was thriving despite diplomatic tensions.

Australian wine and beef industry representatives are pressuring the government to patch up diplomatic differences with Beijing that the industries fear are impacting on exports to China, Australia’s most important trading partner. Australia sees the major strain as its plan to ban covert foreign interference in domestic politics.

Australia-based Treasury Wine Estates, one of the world’s largest wine companies, told the Australian Securities Exchange last month that its wine was being delayed while going through Chinese customs.

Trade Minister Steven Ciobo said yesterday he had taken up the company’s complaint with Chinese authorities during a recent visit to Shanghai and had had “a high degree of success.”

Ciobo did not reveal how much of the wine backlog had been allowed off the Chinese docks, saying that was commercially sensitive information.

“Where we do see an irritation, we work in a constructive way to overcome that,” Ciobo told Australia’s National Press Club.

“I’m not papering over where there’s challenges, but it is also critical that we don’t lose sight of the bigger picture here which is a trade-investment relationship that is very strong, very broad and very deep,” he added.

Australian wine exports to China are booming since a bilateral free trade agreement took effect in December 2015.

Wine exports have climbed from 211 million Australian dollars (USD162 million) annually three years ago to more than AUD1 billion — almost double the value of exports to Australia’s next biggest customer, the United States.

Winemakers’ Federation of Australia chief executive Tony Battaglene said several of Australia’s larger wine exporters had experienced the same problems with Chinese customs as Treasury Wine Estates.

“Certainly we’ve seen improvement of these issues at the border since the visit of Ciobo. Hopefully things are going to get back to normal,” Battaglene said.

The holdups were caused by Chines customs officials making more inspections in search of country-of-origin certificates that entitle Australian wine to preferential tariff treatment under the free trade deal.

“It was taking a month or longer to get approval of shipments to cross the border, and it always does take a little bit of time because it’s China,” Battaglene said. “But we’re now seeing inspections have gone back to what we would consider more appropriate levels and products are starting to go through so hopefully it will continue,” he added.

Battaglene said he could not quantify how much wine had been delayed. A Treasury Wine Estates spokeswoman declined to comment.

In Beijing, a Foreign Ministry spokeswoman defended the right of the country’s customs officials to inspect imported products and suggested that talk of delays at Chinese ports was mere speculation.

“You say that it’s delayed,” spokeswoman Hua Chunying told reporters at a regular briefing. “I wonder if this is a fact or merely speculation by certain people and companies from Australia.”

She said China and Australia’s customs authorities maintain “smooth communications.”

Ciobo said he did not know for much longer Chinese customs officials would demand more paperwork for Australian wine.

“Product is moving and ultimately, I think that is an indication of the strength of the relationship and the open lines of communication,” Ciobo said.

China’s Foreign Minister Wang Yi last month demanded Australia take “concrete actions” to improve bilateral ties. Rod McGuirk, AP