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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 products.

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).

 

 

 

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