NZ joins WTO wine complaint against Canada

Canadian restrictions on wine imports are "arbitrary and disadvantageous" to exporters, Australia has argued to the WTO. Photo: Troy Rawhiti-Forbes.

New Zealand has confirmed it will join Australia in a World Trade Organisation complaint against Canada over allegedly “arbitrary and disadvantageous” treatment of wine imports.

According to The Australian, Trade Minister Steve Ciobo launched the WTO proceedings against Canada after bilateral talks between the two countries broke down.

In a statement, Ciobo said Australia believed Canada’s “arbitrary and disadvantageous restrictions” on the sale of imported wine in the country’s grocery stores were inconsistent with its WTO obligations.

“While it would have been preferable to resolve this issue bilaterally, it is appropriate to commence dispute proceedings given the lack of progress.”

An MFAT spokeswoman confirmed New Zealand planned to join Australia’s WTO complaint as a third party, while Trade and Export Growth Minister David Parker declined to comment.

Australia’s formal “request for consultations” to the WTO argues a range of distribution, licensing and sales measures, including product mark-ups, market access and listing policies, may discriminate “either directly or indirectly” against imported wine.

In the Canadian province of British Columbia, only the province’s wine can be sold on regular grocery store shelves, while imports can only be sold “through a so-called ‘store within a store’”.

Australia’s complaint mirrors a similar dispute from the United States, revived by the country in late 2017.

Canada strained relations with its trans-Tasman trading partners at Apec, when it pulled out of TPP talks at the last minute without explanation - a move which led unnamed Australian officials to claim the Canadians had “screwed everybody”.

The country is New Zealand’s fourth-largest market for wine, with $107 million of exports in 2017 - behind only the US, the UK and Australia.

ExportNZ executive director Catherine Beard said the WTO action was a welcome attempt to address tariff and non-tariff barriers in Canada that put exporters at a disadvantage.

“That’s what the WTO is there for, it sets out trade rules that everyone's agreed to play fair and square and that’s obviously not happening.”

New Zealand exporters were likely to face the same barriers as their Australian counterparts, while improved access to the $7 billion Canadian wine market could be lucrative.

“Our industry’s doing incredibly well, especially into the United States, and Canada’s obviously a close neighbour, so it would be fantastic to have more of an equal opportunity into that market.”

Winemakers Federation of Australia chief executive Tony Battaglene told The Australian there had been long-running issues with exporters’ access to the Canadian market, but protectionism had “ramped up” in recent years.

“If it was just one or two things you wouldn’t be concerned, but when there is a pattern that comes right across the country from the different provinces, it starts to paint a picture of how we can be severely impeded so we want to get on top of it before it becomes a real issue.”