Canadian wine is on NAFTA ne­go­ti­at­ing ta­ble

Cape Breton Post - - Canada -

U.S. Trade Rep­re­sen­ta­tive Robert Lighthizer has an is­sue with getting agri­cul­tural prod­ucts to Canada, and it might not be the ones you think.

“It’s an extraordinary prob­lem for those peo­ple who are af­fected,’’ Lighthizer said June 22 when he ap­peared be­fore the House of Rep­re­sen­ta­tives ways and means com­mit­tee to talk about trade pri­or­i­ties. “And there is no jus­ti­fi­ca­tion for it.’’

Much of the spot­light on Canada-U.S. trade lead­ing up to the new North Amer­i­can Free Trade talks has been on dairy prod­ucts.

This time, though, Lighthizer was not talk­ing about cheese, but what you pair it with: wine.

Two days be­fore Pres­i­dent Don­ald Trump en­tered the White House, the U.S. launched an ag­gres­sive trade chal­lenge by ask­ing the World Trade Or­ga­ni­za­tion to ex­am­ine how the B.C. gov­ern­ment was al­low­ing only wine pro­duced within the prov­ince to be sold in gro­cery stores.

Lighthizer told the com­mit­tee in June that WTO con­sul­ta­tions — the first stage of the process — had not re­solved things, so the ad­min­is­tra­tion was think­ing about whether to press ahead with a dis­pute set­tle­ment panel in Geneva.

Then he men­tioned an­other, per­haps friend­lier, way to go: the new NAFTA.

“In this case it would make more sense to ne­go­ti­ate and do it in a less hos­tile way,’’ he said.

A month later, Lighthizer pub­lished the list of goals the Trump ad­min­is­tra­tion has for a rene­go­ti­ated trade deal with Canada and Mex­ico, in ad­vance of the first round of talks on Aug. 16.

Canadian wine got a men­tion in the ac­com­pa­ny­ing news re­lease.

The move to al­low only B.C. wines to be sold in B.C. gro­cery stores, which the U.S. ar­gues is dis­crim­i­na­tory, is not the only is­sue the Trump ad­min­is­tra­tion has with the way Canada im­ports and sells wine.

The U.S. gov­ern­ment’s an­nual re­port on trade bar­ri­ers high­lights a com­plaint that would be shared by many Canadian con­sumers who have long chafed at lim­ited ac­cess: in many parts of the coun­try, prov­ince-run liquor con­trol boards re­strict the sale of wine, beer and spir­its.

Re­stric­tions on list­ings, cost-of-ser­vice mark-ups, max­i­mum or min­i­mum price points, dis­tri­bu­tion poli­cies, la­belling re­quire­ments and mak­ing sup­pli­ers dis­count their prices to meet sales tar­gets were all men­tioned as things getting in the way.

The re­port said the U.S. gov­ern­ment is re­view­ing the sit­u­a­tion in On­tario, where about 70 gro­cery stores are now al­lowed to sell both do­mes­tic and im­ported wine, un­der cer­tain con­di­tions that in­clude coun­try of ori­gin.

It also sug­gested a re­cent move to al­low Que­bec wine to be sold in Que­bec gro­cery stores could give craft winer­ies an un­fair ad­van­tage.

The fledg­ing Canadian wine in­dus­try won some con­ces­sions in the 1987 Canada-U.S. Free Trade Agree­ment (CUSTFA), which meant they were al­lowed to grand­fa­ther in some pro­tec­tion­ist mea­sures to sup­port do­mes­tic wines in ex­change for open­ing up the Canadian mar­ket to more U.S. wines.

Those pro­tec­tions were in­te­grated into NAFTA.

Tom LaFaille, the vi­cepres­i­dent and in­ter­na­tional trade coun­sel for the Wine In­sti­tute, an ad­vo­cacy or­ga­ni­za­tion for the Cal­i­for­nia wine in­dus­try, ar­gued the Canadian wine in­dus­try is now big enough that it should not be able to get away with such sup­ports.

“We just feel that it’s im­por­tant to end those prac­tices, some of which may have been im­posed when Canadian wine was in its in­fancy,’’ said LaFaille. The Canadian Vint­ners As­so­ci­a­tion, mean­while, is tread­ing care­fully when it comes to NAFTA.

CP PHOTO

Ripe grapes hang on vines pro­tected from birds with a net at the Okana­gan Val­ley’s River Stone Es­tate Win­ery in Oliver, B.C.

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