Canada Comes to Terms with EU over Beverage Alcohol (September 18, 2003)
On Tuesday, September 16th, Pierre S. Pettigrew, Canada's Minister for
International Trade, and Lyle Vanclief, Minister of Agriculture and Agri-Food,
signed an agreement to end a long-standing dispute over wine and spirits
with the European Community.
Under the terms of the agreement, Canadian wineries will no longer be
able to use a range of generic names such as Chablis, Chianti, Mosel,
Port, Sherry and Champagne for locally made products. Following a phase-out
period, provincial liquor boards will not list any wines so labeled unless
they come from the geographic region that historically has produced them.
In addition, the European Community has received assurances that the
provincial liquor systems will take a more even-handed approach to imported
This dispute goes back to 1986, when the EU complained that certain practices
by provincial liquor boards violated Canada's obligations under the GATT
by giving preferential tax breaks to Canadian wine over imported products
and allowing the operation of stores selling exclusively Canadian wine
while prohibiting European wine stores.
Following negotiations in 1989, Canada signed a bi-lateral wine and spirits
agreement that permitted certain provincial policies that favoured Canadian
wineries to continue. But in the late 1990s the EU threatened to take
Canada before the World Trade Organization unless Canada agreed to negotiate
further. It has taken five years to hammer out the current agreement.
Under its terms, Canada will maintain its current liquor distribution
system with its winery retail stores and Canadian wine stores. The agreement
will also give Canadian products, including Icewine, access to the European
market. Its provisions will also give European acceptance of Canadian
winemaking practices and validation of Canada's appellation system, Vintners
Quality Alliance (VQA).