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US PRODUCERS WELCOMED JAPAN TRADE DEAL, DENOUNCED TARIFFS ON EU WINES

By Siulan Law Mathews DipWSET

9-10-2019



The Wine Institute, the trade organisation for California wine producers, welcomed the US-Japan Trade Agreement that would eliminate Japanese tariffs on US wines. It also denounced President Trump’s decision to snap punitive tariffs on imported wines from the European Union (EU) saying that they are a keen supporter of free trade.

“Japan is a vitally important market for California wineries, however, the US has been the only major wine producing country paying a 15% import tariff. We are pleased with this agreement which, once implemented, will reduce tariffs on agricultural products including wine," said Robert Koch, President and CEO of Wine Institute.

“The new trade agreement will level the playing field for California wine in Japan and create more opportunities for Japanese consumers to enjoy the quality and diversity of Golden State wine. We look forward to both governments making progress towards the implementation of this agreement as soon as possible.”

From 1st April 2020, Japan will reduce tariffs on US bottled wines from the current 15% to 7.1% which will eventually be phased out by 2025.

It is understood that the tariff for US bulk wine will be eliminated upon implementation of the trade agreement.

Soon after signing the trade deal with Japan, the Trump administration announced a retaliatory 25% tariffs on bottled wines from France, Spain, Germany and the United Kingdom.

Though this new tariff would theoretically help boost sales of US wines in the domestic market, the Wine Institute has issued a statement to denounce the punitive tax.

“Wine Institute has always supported the fair, open and reciprocal trade of wine around the world. Consumers worldwide have embraced California wines because of our premium quality, diverse offerings and leadership in sustainability," said Robert Koch.

“However, we are concerned that this action will lead to increased tariffs on US wines and set back our efforts to continue growing US wine exports.”

The EU is the largest export market for US wines, reaching USD469 million (€424 million) in 2018.

The Wine Institute said they have long supported the position that wine should not be targeted for retaliation in trade disputes involving products other than wine.

California producers are responsible for 90% of US wine exports, the Wine Institute has always been regarded as an organisation to represent California as well as US wine producers.

(the writer can be contacted at: SLawMathews@thewinechronicle.com)

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