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Wine Spectator: American Wine Sales May Suffer As Canada And U.S. Battle Trade Issues

May 28, 2015

A trade dispute between the United States and its northern neighbor has turned serious in recent weeks, and American winemakers are beginning to fear that their sales in Canada—the top export market for U.S. wine—will be badly damaged. The battle comes as Californian winemakers are already crying foul over new laws in British Columbia they allege discriminate unfairly against U.S. wines in favor of local wineries.

For 13 years, the Canadian and Mexican governments have objected to American “country of origin labeling” (COOL) rules for certain cuts of meat sold in the U.S. They argue the laws discriminate against their meat products and violate the North American Free Trade Agreement (NAFTA). On May 18, the World Trade Organization (WTO) agreed, allowing the countries to propose tariffs on American products within 60 days. Canada plans to target U.S. beef, pork, wine, fruit, corn and other products with tariffs that could total $2 billion a year. The proposed levies could double the price of a bottle of U.S. wine as it enters the country. American wines already face markups by Canada’s provincial governments.

The wine industry has called on Congress to repeal the COOL regulations. According to the Canadian Vintners Association, U.S. table wine imports (90% of which come from California) reached $1 billion in retail sales in 2014. The market is now the largest export destination for California wines, with a record 6.1 million cases sold.

To stop the tariff, U.S. congressmen Mike Conaway of Texas and Jim Costa of California are sponsoring H.R. 2393, a bipartisan bill that would repeal COOL requirements for beef, chicken and pork. Some lawmakers have voiced opposition however, arguing that the COOL rules protect small ranchers and farmers and inform consumers of where their food comes from. Wine Spectator has the full story.

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