Australia takes Canada to WTO over 'wine discrimination'

A group of kangaroos in between rows of vines at the Charles Melton vineyard located in the Barossa Valley, north of Adelaide in Australia.
A group of kangaroos in between rows of vines at the Charles Melton vineyard located in the Barossa Valley, north of Adelaide in Australia.PHOTO: REUTERS

SYDNEY (AFP) - Australia said Wednesday (Jan 17) it was taking legal action against Canada at the World Trade Organisation (WTO) over "arbitrary and disadvantageous" restrictions against imported wine, expanding on a similar US complaint.

Canberra said the measures by several provinces hurt trade with Australia's fourth-largest export market for wine, valued at A$185 million (S$195 million).

The move comes amid concerns that Canada is seeking to curb access to its markets in the face of efforts to resuscitate the landmark Trans-Pacific Partnership (TPP) deal after the US pulled out.

"Australia has requested formal (World Trade Organisation) consultations on measures discriminating against Australian wine imports that we consider to be clearly inconsistent with Canada's WTO commitments," Australia Trade Minister Steve Ciobo said in a statement.

Ciobo said the measures included extra taxes, fees and mark-ups on imported wine, separate distribution channels reserved for local wine and restricting the sale of imported wine in grocery stores to a "store within a store".

This meant imported wine was sold in a separate section and cash register at a grocery store, unlike local varieties which retail openly on shop shelves.

Australia's complaint expands on a similar US argument filed one year ago against British Columbia, and encompasses other provinces including Ontario and Quebec.

WTO consultations are the first stage in a dispute-settlement action. If the issue is not resolved within 60 days, Australia could then request a WTO panel of experts to review the case.

The action came just months after Canadian Prime Minister Justin Trudeau threw a spanner in the works during efforts to resurrect TPP on the sidelines of the annual Apec summit in Vietnam in November when he pushed for some stronger protections.

But Ciobo said the Australian complaint was unrelated to Trudeau's actions at the summit, although he conceded it was "disappointing" the Canadian leader did not sign up to an agreement on the TPP, which now involves 11 countries after the United States withdrew last year.

"The fact is we have continued to see an erosion of, for lack of a better term, liberalised market access into Canada," he told ABC Radio Wednesday.

The trade dispute came a day before Australian Prime Minister Malcolm Turnbull meets with his Japanese counterpart Shinzo Abe in Tokyo, with the survival of the TPP one of the key items on their agenda.