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US launches trade action against Canada over BC wine

Last Updated Jan 18, 2017 at 2:58 pm PDT

(iStock Photo)
Summary

The US claims the local policy violates WTO commitments

BC NDP says Victoria shouldn't be surprised the Obama administration is taking action

WASHINGTON, DC. (NEWS 1130) – The US is launching trade action against Canada over our province’s policy of only allowing BC wines on grocery store shelves. The Obama administration claims that discriminates against US winemakers and is a violation of our country’s World Trade Organization agreements.

“American winemakers produce some of the highest-quality, most popular wines in the world. When US wine producers have a fair shot at competing on a level playing field, they can compete and win in markets around the globe,” says US Trade Representative Michael Froman. “The discriminatory regulations implemented by British Columbia intentionally undermine free and fair competition, and appear to breach Canada’s commitments as a WTO member. Canada and all Canadian provinces, including BC, must play by the rules. This Administration is continuing to fight to level the playing field for American producers and workers, so that we can continue to grow our economy and support quality jobs across the United States.”

The acting agricultural secretary in the US says American winemakers have, in the past, found success by selling their products here.

“However, we could be doing even better. In British Columbia the local wines get an unfair advantage because they can be sold on grocery store shelves, while US wines cannot. The United States simply seeks equal opportunities to market our wines, consistent with Canada’s international obligations.”

This isn’t the first time the US has taken issue with BC wine rules. In November of 2016, winemakers in Australia and California wrote an angry letter to the premier over the same policy.

BC NDP Liquor Policy Critic David Eby suggests this was a predictable outcome. “It’s really obvious to everybody who’s looked at it that what the provincial government has done is illegal under trade policy,” he suggests. “Either it was part of their plan that it would be challenged and then cheap international wine could be put in grocery stores, or they naively hoped that the US would simply look the other way and ignore this.”

Eby claims this is particularly unfortunate given the current trade tension over softwood lumber. “This shouldn’t be a surprise to anyone, especially the provincial government,” says Eby. “They were warned repeatedly that the US would take action like that and it seemed even more likely with Donald Trump in power. The bizarre thing is that the provincial government would proceed along this route knowing that we’re trying to renegotiate the softwood lumber agreement right now, and also that they would take this action knowing that it was very likely that the US would succeed in this challenge and BC products would be shoved aside for cheap international wines in grocery stores.”

The Obama administration’s move is already being praised by the California-based Wine Institute, the public policy advocacy group for wineries in that state.

“Wine Institute appreciates the US government’s actions to resolve this dispute,” says the institute’s President and CEO Robert Koch. “We urge the WTO and the governments involved to reach a fair and equitable solution so that BC grocery store consumers can choose from the vast array of the world’s great wines. BC consumers are among the most knowledgeable and sophisticated purchasers of wine. Any expansion of retail distribution channels should ensure that consumers have convenient access to their preferred wines from around the world.”

The federal ministry of international trade his released a statement.

“We are aware of US concerns related to the distribution and sale of wine in BC. Canada takes its international trade commitments very seriously and gives careful consideration to a request for consultations from any WTO member.”

Response from the province:

Minister Shirley Bond has responded in a statement to the launch of a WTO trade challenge against BC wine in grocery stores policy saying, “we are proud of the world-class products that BC wineries produce, the jobs that they create, the positive contributions they make to BC’s economy.

“Our framework for liquor sales in grocery stores lays the foundation for a flexible and unique model that will continue to protect health and public safety, enhance convenience and choice for consumers.

“We talked to thousands of British Columbians about what they wanted to see regarding liquor sales. We listened and we delivered.

“We support the growth of the industry, and we will defend it against this challenge. The BC government is confident that we are complying with BC’s and Canada’s international trade obligations.

“We will continue to work closely with Global Affairs Canada (GAC) to ensure that BC’s liquor policies fall within these trade obligations, and we will continue to work with GAC through the upcoming consultation process.

BC Wine Institute president Miles Prodan discusses what this mean: