The Federal Government has initiated formal World Trade Organisation (WTO) dispute settlement action against Canada over trade discrimination involving Australian wine.
The move has been made by Trade Minister Steve Ciobo and is the first step in starting formal consultation with Canada over measures which the Government believes impose arbitrary and disadvantageous restrictions on the sale of imported wine in Canadian grocery stores, inconsistent with Canada’s WTO obligations.
In a statement the Minister said: “This step responds to concerns from the Australian wine industry regarding the Canadian measures, which negatively impact trade with Australia’s fourth largest export market for wine, currently valued at $185m.
“Australia strongly supports the multilateral trading system, with the WTO at its heart. One of the key strengths of the WTO is its disputes system, which ensures WTO Members comply fully with their commitments.
“While it would have been preferable to resolve this issue bilaterally, it is appropriate to commence dispute proceedings given the lack of progress.”
Speaking to ABC Radio earlier today Ciobo said that this was not related to the Canadian Prime Minister’s snub of Trans-Pacific Partnership negotiations at the APEC Summit in Vietnam last year.
“These are unrelated events,” the Minister said. “The fact is that we have continued to see an erosion of, for lack of a better term, liberalised market access into Canada.
“That’s putting Australian wine exporters on the back foot, compared to other competitor countries and in particular, compared to domestic Canadian wine producers. That’s an unacceptable outcome.
“I want to make sure that I stand up for Aussie wine exporters. We know we have some of the best wine in the world and I want to ensure that Australian wines have their very best chance of reaping the benefits of export sales in a market like Canada.”
The move has been welcomed by the Winemakers’ Federation of Australia (WFA), with Chief Executive, Tony Battaglene, saying that the action was the first formal step in seeking to resolve long-standing Canadian measures that discriminate against Australian wine imports.
“Canada is Australia’s fourth most valuable export market at around $190m and remains a very important destination for Australian wine,” Battaglene said.
“Australia is the fifth-ranked country of origin, with a 10 per cent total volume share of the Canadian market behind wines from the United States, Canada, Italy, and France.
“Wine sales in Canada are controlled by provincial liquor boards. In recent years, the liquor boards have introduced a number of measures that discriminate in favour of locally produced wine. We respect the Canadian wine industry, but we are seeking a level playing field to ensure we can maximise our opportunities in this key market.
“The WTO provides a rules-based system that is vital to ensuring countries around the world ensure their regulations are fair and non-discriminatory. We are delighted the Australian Government has decided to take action over these issues and the winners will be Australian producers and Canadian consumers.”
Twelve months ago the United States launched its own WTO trade dispute settlement action against Canada regarding ‘Measures Governing the Sale of Wine in Grocery Stores’ which Australia joined as a third-party observer. The new Australian-led WTO action addresses these same concerns as well as others across the Canadian provinces.