U.S., Other Wine Producers in Pact to Boost Exports
Frustrated with being dismissed as wannabes by Europe’s influential winemakers, the U.S. and four leading wine-producing countries joined forces this week in a trade agreement aimed at bolstering their global stature and their exports.
In the agreement, signed Tuesday in Toronto, the five countries--the U.S., Canada, Australia, Chile and New Zealand--agreed to accept one another’s winemaking techniques, recognizing that practices differ because of local conditions, climate and traditions. Together, the nations represent 12.3% of the wine-exporting market.
The pact could provide a boost to California winemakers, which produce 90% of the nation’s wine and have faced high tariffs and other barriers overseas.
Last year, the U.S. exported $93million worth of wine to the other countries, the rest of the New World wine group. The U.S. imported $434 million worth of wine from those countries.
Over the last 15 years, U.S. wine exports have grown from $25 million to $550 million and are projected to reach $1 billion by 2006. Imports make up 20% of the U.S. market.
The U.S. is counting on this week’s agreement to raise the heat on Europe, which is accused of using restrictive labeling and marketing standards, high tariffs and other measures to protect small, inefficient winemakers.
Wine, a staple on many European tables and part of its cultural mystique, is the region’s leading agricultural export. Italy, France and Spain control 66% of the global wine export market.
The U.S. and other countries will negotiate tariff reductions on wine and other agricultural products as part of the trade talks launched last month by the Geneva-based World Trade Organization.
American winemakers have long bristled at being treated like second-class citizens in the winemaking world.
“This kind of sends a signal all over the world that if the New World wine group is accepting each other’s winemaking practices, maybe the Old World should do so also,” said John De Luca, president and chief executive of the Wine Institute in California. “For them to say we don’t measure up really is not acceptable.”
But the Europeans say the U.S. and other countries use processes for producing wine, such as methods for clarification and fermentation, that violate traditional winemaking practices.
They also oppose the widespread use of geographical terms such as Champagne and Burgundy, saying those should be applied to products only from those regions.
European Union sources in Washington said Thursday that the Toronto agreement is being studied and that the EU is interested in pursuing an agreement with the U.S. that addresses both the winemaking practices and the geographical concerns.
The Agreement on Mutual Acceptance of Oenological Practices goes into effect as soon as two of the five signatory countries complete their government’s approval process for trade agreements. Argentina and South Africa, which participated in the talks, have until March to join.
