Final Step Taken to Avoid Costly Tariffs on American Wine in Canada

3.7.2016

By Michael Kaiser

The Department of Agriculture (USDA) has finalized the rule repealing country of origin labeling rules (COOL) for certain muscle cuts of meat. The repeal, as authorized by the 2015 Omnibus Appropriations Bill, will allow the the US to avoid costly tariffs places on goods, including wine, exported into Canada and Mexico.

WineAmerica worked tirelessly as a member of the COOL Reform Coalition to make sure the COOL rules were repealed to avoid a complete disruption of the American wine market in Canada. In 2014, U.S wine exports to Canada reached $487 million, a 7% increase from 2013. Retail sales for American wine in Canada now eclipse $1 billion. In 2013 the U.S. was the second largest exporter of wine to Canada, with a 16% market share among wine imports sold in Canada. If the over $1 billion in retaliatory tariffs were implemented by Canada, the costs of US wine exported to Canada would have rose exponentially. If the Canadian market was to shrink, the excess wine would have remained in the United States, causing a glut. This was not something our industry would have been able to tolerate.

The COOL issue is an example of an issue that seemingly has no bearing on wine, but as a value added product, it is an easy target for tariffs and other trade barriers. WineAmerica did not have a position either way on the labeling rules themselves, but in order to protect the interests of American wine in the Canadian market and here in the United States, we had to become a leader in the COOL Reform Coalition. We worked hand in hand with our partners working House and Senate offices to secure repeal. When a witness was needed for a Senate hearing, we provided it (Wine Testifies for the Senate) and without the work of our grassroots network we would have never been able to stop the tariffs from being implemented. Wineries and associations from as far flung as Washington and Virginia played an important role in getting the message out about the dangers of this issue.

This COOL repeal is just one example of what WineAmerica is doing in Washington, DC to protect the business interests of American wineries. We are the only national organization working for the American wine industry in our nation’s capital.

***

Questions? Contact Michael Kaiser, Director of Public Affairs, mkaiser@wineamerica.org

WineAmerica is the national voice of the American wine industry. Based in Washington, D.C., WineAmerica represents wineries in 43 states and leads a coalition of state and regional wine and grape associations. As an industry leader, WineAmerica encourages the dynamic growth and development of American wineries and winegrowing through the advancement and advocacy of sound public policy.

Circular New Logo (1) (1)

WineAmerica Supports Tariff Reductions in the Trans Pacific Partnership Trade Agreement

October 9, 2015

Washington D.C., WineAmerica supports the completion of the Trans Pacific Partnership (TPP) trade agreement announced by the United States and 11 other Pacific Rim nations. The agreement is expected to eliminate existing high tariffs placed on American wines abroad and establish more enforceable trade rules for wine.

“Asia is an emerging and very important market for U.S.,” said Caroline Shaw, Executive Vice President of Jackson Family Wines and current WineAmerica Board Chair. “New multilateral trade agreements, such as the Trans Pacific Partnership, could allow American wines to compete with other exporting wine producing nations and result in an increasingly competitive international market.”  This situation is good for both the wine producer and the consumer.

The 12 TPP countries have agreed to an agreement in principle, but the final text is not completed, nor has it yet been released to be the public. WineAmerica will evaluate the final text of the agreement when it becomes available. With the passage of Trade Promotion Authority (TPA) earlier this year, which WineAmerica supported, Congress must approve the final agreement before the President can sign it, but may not offer amendments.

The 12 TPP countries are Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam. The Office of the United States Trade Representatives has released a public summary of the deal.

Reach out to Michael Kaiser, Director of Public Affairs here at WineAmerica with any questions: mkaiser@wineamerica.org.

WineAmerica is the national voice the American wine industry. Based in Washington, D.C., WineAmerica represents wineries in 43 states and leads a coalition of state and regional wine and grape associations.  As an industry leader, WineAmerica encourages the dynamic growth and development of American wineries and winegrowing through the advancement and advocacy of sound public policy.

Wine Testifies for the Senate

Senate Agriculture Committee Hearing on COOL

June 25th, 2015

Washington D.C. — Today the Senate Agriculture Committee held a hearing on the Country of Origin Labeling dispute.  A list of U.S. commodities, including wine, faces over three billion dollars in tariffs from Canada and Mexico. WineAmerica Board Member and New York Wine and Grape Foundation President, Jim Trezise, spoke to the effect that these tariffs would have on the wine industry. Other panelists included representatives from the North American Meat Institute, the American Farm Bureau, Cattlemen’s Association, Kansas Livestock Association, Archer Daniels Midland Company Corn Processing Business Unit. The hearing was lead by Senator Pat Roberts (R-KS), Chairman of the Senate Committee on Agriculture and Ranking Member Senator Debbie Stabenow (D-MI).

Mr. Trezise presented the need for swift legislative action and the need for full repeal of COOL. Canada and Mexico have repeatedly stated that full repeal is the only solution that they will accept. Additionally, Trezise addressed the importance of the Canadian market for New York and other regions. Canada is the largest export market for U.S. wine, and the proposed tariffs will have a devastating impact on the the American wine industry.

WineAmerica thanks the Senate Committee on Agriculture, Nutrition, and Forestry for holding the hearing on COOL and for inviting a member of the wine industry to testify.

Background: Country of Origin Labeling, or “COOL,” is a law requiring retailers to indicate the country of origin on a cut of meat. In 2009 Canada challenged the American implementation of this law at the World Trade Organization (WTO). The WTO ruled in Canada’s favor and has continued to do so in all subsequent appeals. With today’s final ruling, Canada and Mexico will be able to levy tariffs against American products. Wine is on the preliminary “hit list” made public by Canadians.

Tariffs against American wine will be a huge hit to our industry. Canada is the largest foreign market for American wine.  Last year U.S wine exports to Canada reached $487 million, a 7% increase from 2013. Retail sales for American wine in Canada now eclipse $1 billion. In 2013 the U.S. was the second largest exporter of wine to Canada, with a 16% market share among wine imports sold in Canada.

The preliminary Canadian plan would place a tariff on wine based on the value of the product entering the country. For example, a wine with a $10 import value would be hit with a $10 tariff, doubling the cost of the wine sent into the country. Apart from the immediate financial loss, the American wine industry could face long term effects. Raising the price of a bottle of a US wine will hinder competition with other wine regions, notably South Africa and Australia. The United States could lose shelf space that would take years to regain.

Current Action: Earlier this month the House of Representatives passed a bi-partisan bill repealing the COOL requirements. With the August congressional recess looming, and with the WTO review period ending on August 17, the Senate must act quickly. The Canadian and Mexican governments have made it clear that, short of a full repeal of the COOL meat labeling rules, the tariffs will commence. If the COOL rules are not repealed, the tariffs will go into effect as early as September and will last at least two years.

WineAmerica is the national voice the American wine industry. Based in Washington, D.C., WineAmerica represents wineries in 43 states and leads a coalition of state and regional wine and grape associations.  As an industry leader, WineAmerica encourages the dynamic growth and development of American wineries and winegrowing through the advancement and advocacy of sound public policy.

View Chairman Robert’s statement on COOL

Questions? Contact Michael Kaiser at mkaiser@wineamerica.org

 

photo 2 (1)

photo 3 (2)

photo 4 (1)

photo 1 (2)

WineAmerica Supports Trade Promotion Authority

WineAmerica, the National Association of American Wineries, supports the bipartisan effort to renew Trade Promotion Authority (TPA) for new trade agreements in foreign markets. The Bipartisan Congressional Trade Priorities and Accountability Act of 2015, introduced by Senators Hatch (R-UT) and Wyden (D-OR) in the Senate and Rep. Ryan (R-WI) in the House will help open new markets and expand existing markets for American wine and for other agricultural commodities across the country.

U.S. agriculture exports have continued to grow exponentially over the last decade. In 2014 American producers exported $152 billion in agriculture commodities. U.S. Wine exports accounted for $1.5 billion in 2014.

“Asia is an emerging and very important market for American wine,” said Caroline Shaw, Executive Vice President of Jackson Family Wines and current WIneAmerica Board Chair. “New free trade agreements, such as the Trans Pacific Partnership, could allow American wines to compete and excel in an increasingly competitive international market”

Trade Promotion Authority will allow the President to pursue objectives specified by Congress and meet consultation guidelines specified by Congress as it negotiates future trade agreements. In return for this, Congress agrees to allow for expedited consideration of trade agreements without amendments.

TPA will allow the President to negotiate trade agreements that meet the needs of the American wine industry and continue to help it expand to new and emerging markets. WineAmerica applauds the Senate for passing this important piece of legislation that will allow U.S. wineries easier access to the international market. We are confident the House of Representatives will follow suit.

Questions? Contact Michael Kaiser at mkaiser@wineamerica.org

 

Congress Moves to Protect U.S. Wines from Canadian Tariffs

May 19th, 2015

Washington, D.C. – Rep. Mike Conaway (R-TX), Chairman of the House Agriculture Committee, has introduced bipartisan legislation to repeal Country of Origin Labeling (COOL) for certain cuts of meat to avoid retaliatory tariffs on a variety of U.S. exports to Canada and Mexico. The bill, H.R. 2393, would repeal the country of origin labeling requirements for beef, chicken, and pork. The bipartisan legislation currently has 60 original co-sponsors.

The full House Agriculture Committee will be holding a hearing on H.R. 2393 tomorrow, and a markup is expected to follow. Currently there are no amendments proposed, but that could change in the committee markup. Once reported from committee the bill will head to the House floor, which could happen as soon as early June.

This morning WineAmerica attended a press conference at the Capitol for H.R. 2393.  The press conference was held by the two lead sponsors of the COOL repeal legislation, Chairman Conaway (R-TX) and Congressman Jim Costa (D-CA). They were joined by members of both parties  who expressed their support of the legislation.  Industry representatives spoke in support of the legislation and praised Conaway’s and Costa’s efforts.  Bobby Koch, President of the Wine institute was in attendance, saying that the market for American wine had increased 78 percent into Canada over the last five years,  where total wine sales had increased only 16 percent.  He stressed that all of this is in jeopardy of being lost if the retaliatory tariffs on wine are implemented.  Congressman Costa also stated the importance of wine, stressing that California alone would face a $1 billion retaliation hit this fall if the existing COOL rules are not repealed.

Read More: U.S. Wine Industry Facing Steep Tariffs from Canada

The Senate Agriculture Committee will also be working on a solution to the WTO ruling. Chairman Pat Roberts (R-KS) has stated he is open to any solution, including repeal for meat, to prevent retaliatory tariffs. Ranking Member Debbie Stabenow (D-MI) has come out against repeal. It is unclear when the Senate might take action.

Canada and Mexico have been clear that nothing short of a full repeal of the COOL rules will satisfy their respective governments. Without a full repeal, the World Trade Organization has authorized Canada and Mexico to take punitive action against the United States in the form of retaliatory tariffs.

WineAmerica supports efforts by Congress to address the COOL regulations, including the repeal legislation introduced Representatives Conaway and Costa. WineAmerica’s government affairs team will be advocating for quick action on H.R. 2393. Retaliatory tariffs could be implemented as soon as August, Congress must work quickly to address the issue.

Questions and inquires should be directed to Michael Kaiser, Director of Public Affairs at mkaiser@wineameria.org.

Read more about WineAmerica’s policy issues.