Why Taiwan considers Aussie wine a taste of freedom

Taiwan keeps a constant watch on the activities of its antagonistic neighbour across the strait. Picture: AP

When visiting foreign journalists met the Deputy Minister of Foreign Affairs in Taiwan’s capital, Taipei, for an official banquet this week they were served wines from South Australia-based Tyrone Estate.

A day earlier, wines at lunch for our group of 13 visiting journalists in a government-sponsored study tour of Taiwanese industry were Penfolds red and white.

Taiwan’s Ministry of Foreign Affairs loves to serve Australian wines, says Catherine Hsu, the director general of the Department of Information Services at Taiwan’s Ministry of Foreign Affairs.

“We call it freedom wine,” she said.

Serving Australian wine, she points out, is a reminder to the world of the tariffs imposed on Australian winemakers in 2020 by China in the wake of increasing diplomatic tension.

The tariffs of more than 200 per cent in some cases wiped out a once thriving $1.1bn export trade for Australian winemakers.

Taiwan, with a population of only 24 million people living across the strait from a population of more than a billion people and a military power whose leader who has vowed to reclaim the island by force if necessary, is all too happy to use the example of sanctions against Australian products by Beijing as a warning of the risks doing business with China.

While Taiwan has a substantial trade relationship with China and many of its big companies, including mobile phone manufacturer Foxconn, have factories in China, it had seized on China’s trade sanctions against a range of Australian products as a reminder to the rest of the world.

Taiwan President Lai Ching-te, centre, inspects troops on Tuesday as part of annual military drills. Picture: AFP

“Since the sanctions, the Ministry of Foreign Affairs has never stopped serving Australia wines at every official banquet,” Ms Hsu told visiting journalists.

She noted that Taiwanese pineapples were also banned by China, but Taiwanese producers were grateful when Japanese buyers stepped in.

“Democratic friends should look after each other,” she said.

Ms Hsu also noted the Chinese trade sanctions against imports of canola from Canada in the wake of political tensions between Ottawa and Beijing.

Canadian canola farmers, she pointed out, would have planted their crops years earlier but were hit when China “totally changed their policy overnight”.

China’s sanctions against Australian and Canadian exports play into Taiwan’s argument about the importance of having a “supply chain for democratic countries”.

“We are following a rules-based international order,” Ms Hsu said.

“You wouldn’t expect something like that to happen if you work with democratic parties.”

The fact that the US under Donald Trump arbitrarily imposed tariffs on imports of steel and aluminium (including from Australia) when he was president in 2017 shows otherwise, but you get her point.

At lunch the next day, Deputy Foreign Minister Tien Chung-kwang, an urbane man who speaks English fluently and who recalled with fondness his time working in Brisbane, also continued the theme, sympathising with Australia over China’s trade sanctions.

“These things can happen overnight,” he said.

A week earlier, at The Australian’s Global Food Forum in Brisbane, Australian food exporters discussed the same issue, albeit through their own very different lenses.

Exporters still want to do business with China because of the sheer size and potential of its market but they are also wary of the risks.

“Not putting all your eggs in one basket” when it comes to Australian trade with China has become somewhat of a well worn phrase – but that is also because it is so apt.

Although the sanctions caused significant damage to Australian rock lobster exporters and winemakers, and were used by Beijing to make a point, the question is whether, in the end, it cost China more by damaging its long-term image as a country to do business with.

Post Covid-19, new foreign investment into China has been slow and the aggressive “wolf warrior diplomacy” of the recent past has been quietly dropped.

While China is by far Australia’s largest trading partner, Australia has strong trade relations with Taiwan – despite Canberra’s official recognition of Beijing in 1972.

Under Australia’s view of its “One China policy”, it does not recognise Taiwan as a sovereign state or regard Taiwan as having the status of a national government. All dealings between Australian government officials and Taiwan take place unofficially.

It is a finely balanced diplomatic distinction.

Beijing claims Australia’s One China policy means Canberra accepts Taiwan is part of the People’s Republic of China.

But Australia’s deliberately ambiguous policy only “acknowledges” the PRC claim to Taiwan, and calls for the two sides to resolve their dispute peacefully.

Despite this, Taiwan was Australia’s ninth largest two-way goods and services trading partner in 2023 – a trade worth $33.6bn. The island was Australia’s sixth largest goods-and-services export market in 2023 and that trade was worth $23.5bn.

Coal, natural gas, iron ore, copper and beef, are the major exports followed by agricultural and forestry products, nutritional supplements and quality food and beverages such as wine.

Australia’s merchandise imports from Taiwan were about $9.4bn in 2023, led by refined petroleum, telecommunication equipment and parts, motorcycles and bicycles, computers and inorganic chemicals.

For their part Taiwanese officials have immense goodwill towards Australia and are keen to do more business.

With more than 90 per cent of its energy imported and under heavy pressure to “go green”, Taiwan has a strong need for green energy but few natural resources to do so.

Officials have made it clear to The Australian that they see this as another area of potential co-operation.

At the moment, Taiwan relies heavily on imported fossil fuels for its energy generation.

In 2022, crude oil and petrol made up 44 per cent of its energy supply, coal another 30 per cent and gas about 19 per cent. Renewable energy made up only about 5 per cent.

While this is changing, the shift is a serious challenge for Taiwan.

At the moment Australia supplies two thirds of Taiwan’s coal and almost half of its natural gas.

Renewable and green energy is another key area of opportunity for future developments.

Meanwhile, serving Australian wine at official functions in Taipei provides a quiet reminder of the challenges and opportunities across the Strait.
Glenda Korporaal is visiting Taiwan as a guest of the Taiwanese government.