US in dispute with Canada over wine imports

posted by Su-San Sit
6 October 2017

The US has kept its trade friction with Canada simmering by reviving a trade dispute over what it says are unfair limits on the sale of imported wine.

In a second filed complaint with the World Trade Organisation (WTO), the US accused Canada of unfair restrictions on the sale of foreign wine in British Columbia (BC), Canada’s main wine-producing region.

The WTO said the US made a similar complaint in January but no dispute panel was established and the parties did not notify it of either a solution or withdrawal.

Under legislation introduced two years ago, BC retailers can only sell wines produced in the province on regular grocery store shelves. Imported wines have to be sold in a separate “store-within-a-store” through separate cashiers.

The US complaint argues the policy discriminates against foreign wines by giving local producers “exclusive access” to grocery store shelves and it “discriminates” against imported wine.

Amelia Breinig, US Trade Representative (USTR) spokesperson, said the US would be looking for level access to the wine market in the province. 

“BC's discriminatory regulations continue to be a serious problem for US winemakers,” she said. 

“USTR is requesting new consultations to ensure that we can reach a resolution that provides US wine exporters fair and equal access in BC.”

However, Miles Prodan, president and CEO of the BC Wine Institute, said the US already had wide access to the country.

“We’re not sure why they’re picking on BC,” he said.

“The Americans have got a huge foothold in the Canadian wine sector.”

Canada is a major market for American wine, with figures showing that Canada ranks second after the European Union, buying $431m worth of American wine last year, according the US Wine Institute

Under WTO guidelines, both parties get 60 days of consultations to find a solution out of court once a complaint is made.

The complaint comes as the US, Canada and Mexico try to renegotiate the North American Free Trade Agreement (NAFTA), which US president Donald Trump has repeatedly threatened to terminate.

Gregory Shaffer, a professor at University of California's Irvine School of Law, told CNN that the wine complaint and similar recent trade disputes were part of US efforts “to put pressure” on those talks. 

The two countries clashed over Canadian plane-maker Bombardier, with the US Commerce Department recommending huge tariffs on the company’s latest jetliner, backing a complaint from Boeing.

Earlier this year, the US hit Canada with stiff tariffs on timber exports and last week president Trump took issue with Canada’s dairy industry’s restriction of imports and promised US farmers his administration would intervene to restore exports of American milk. 

Canada was the US's second-biggest trading partner after China last year, buying about $320bn of American exports, according to US government figures.

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