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News
US wine warned of export backlash
The US wine industry faces billions of dollars’ worth of lost sales if Congress doesn’t intervene to prevent a hike in export tariffs by Canada and Mexico, a trade body has warned.
Robert Koch, president and CEO of Wine Institute (Photo: Wine Institute)
The billion-dollar US wine market in Canada and Mexico is under immediate threat as the two countries seek retaliation for the way in which some of their imported American meat is labelled.
Canada and Mexico have the backing of the World Trade Organization, which announced yesterday that the United States faces economic damages totalling $1.01 billion (£730m) in tariffs if it does not repeal its Country of Origin meat labelling.
Canadian and Mexican market authorities argue that this labelling gives imported US meat an unfair advantage over local products.
Robert Koch, president of Wine Institute, said: “We know US wine is on their target lists. Retaliation by Canada and Mexico would set our wine exports back decades and cost billions of dollars in lost sales over time”
The trade body representing producers behind 90% of American wine exports is calling on Congress to take action to remove the controversial Country of Origin labelling before the tariff hike is introduced.
In a stark warning, Koch said: “Without Congressional action now to bring the U.S. into WTO compliance, retaliatory tariffs could be in place before Christmas.”
Canada is the largest export market for American wine, recently surpassing imports of French and Italian wines from France and Italy for the first time.
I don’t get it. In what way is American export meat labeled that gives it an advantage over locally-produced meat in Canada and Mexico?
Jeff Cox, you have one question, I don’t really understand why US Congress has to pronounce and take action against a request seconded by the WTO, that right now only concerns meat labelling. What I can read between lines is, that the US trust more their labels than their products? Are they afraid of loosing and unfair advantage given by labelling that’s why they know wine is on ‘the bad guys’ “target” list? Sorry, but Mr. Koch makes it sound as an unreasonable request in the sake of fair trade.What is the big theat? US knows that both Canada and Mexico produce wines at a much smaller scale. Wine consumption in the US is not enough to supply their own market, so if the exports decline, wouldn’t they have enough marketplace for their wines? Is there not in place a agreement to ship goods within those three north american countries (North American Free Trade Agreement (NAFTA)) why would the US have an advantage over the others? What about the TTP? If it is ratified by all the countries involved, wouldn’t this affect in the way that all products should be categorized under the same standards? Maybe I am mixing too many concepts here, but I really don’t understand the concern.
Hi Jeff and Isabel, this is a very complex issue that has nothing to do with wine but unfortunately the wine business is caught in the middle of it. Make no mistake, the US/CA wine industry will not be the only industry targeted by Canada. For example, from my understanding, industries like the chocolate industry in Pennsylvania will also be targeted by the Canadian government for increased tarriffs as a retaliation for the US Stance on meat labeling.
Basically and from my understanding, we are now requiring country of origin labeling requirements on meat products. Which sounds great at first glance (we all like to know where our food comes from right?). Of course Americans will grab the American labeled meat 9 times out of 10 which certainly gives the American meat producers an advantage in the American Market. But when you dive deeper into the meat industry its not so cut and dry. Apparently within the meat industry their is ALOT of crossover between American Meat and Canadian meat. Meaning cows will spend their life in both countries before they are slaughtered. For example, they may be born in the states but raised in Canada but then slaughtered back in the states. Is that a Canadian cow or an American Cow. Or the cows may be born and raised in Canada and slaughtered in the States or vice versa. Its all very confusing. With so many blurred lines in this industry, a country of origin labeling on this type of product would certainly give the American meat producers an competitive advantage in the US they they don’t necessarily deserve.
So Canada’s retaliation that is supported by the WTO is to tax many american products, not just the wine industry. Let me finish that this is the way I have been educated on the situation but I am sure their is even more to it than what I just described.
Best, Ryan
Why did my reply get deleted?
Weird, now it is showing up… Please disregard