Wednesday, March 20, 2024

Trump’s hardball helps kiwi wine

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Pressure from United States President Donald Trump has caused Canada agree to drop restrictions on the sale of imported wines in the country’s supermarkets.
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But wine exporters here are keeping their excitement in check till they see the measures actually scrapped. 

Since 2015 the Canadian province of British Columbia has allowed imported wines to be sold only in cordoned off parts of grocery stores, at a distance from locally-produced vintages.

Other provinces give local wine first preference for shelf space in supermarkets.

NZ Winegrowers believes the measures could be costing exporters here tens of millions of dollars in lost sales.

Earlier this year the NZ Government joined World Trade Organisation lawsuits by the United States and Australia against import restrictions in British Columbia and other Canadian provinces.

But they are now on ice after the trade agreement between the US, Canada and Mexico.

In a side letter to the agreement Trump’s trade representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland said the US will not proceed further with its WTO complaint if restrictions on imported wine sold in grocery stores in British Columbia are repealed by November 1 next year.

NZ Winegrowers lawyer Jeffrey Clarke welcomed the agreement but said it remains to be seen whether Canada will hold up its end of the bargain.

Clarke recently returned from the US where even industry insiders are unsure whether Canada will follow through and scrap the retail restrictions.

“Everyone will need to see how the implementation actually happens.”

A Foreign Affairs and Trade Ministry spokeswoman said NZ’s involvement in the WTO challenges by Australia and the US will continue in the meantime.

However, while adjudication panels have been established in both cases judges to hear the disputes are yet to be appointed.

Clarke noted the side letter concerns only the restrictions on selling imported wine in British Columbia.

However, he hopes it indicates a willingness to lift restrictions in other provinces, which were the subject of Australia’s complaint to the WTO and which NZ was a party to.

Wine exporters are not the only NZ primary industry participants singing the praises of Trump’s hardball negotiating tactics in the recent North American trade talks.

The dairy industry cheered after Canada agreed to drop a controversial milk price classification when Trump made it a condition of keeping its northern neighbour in the deal.

The Dairy Companies Association said the Milk Class 7 pricing system is to blame for increasing volumes of subsidised Canadian skim milk powder finding their way onto global markets in recent years and had lobbied strongly for the Government to initiate a WTO challenge against the classification, which could have cost NZ farmers up to $100m a year in lost earnings.

Trade Minister David Parker went to Washington DC and Ottawa last week.  

Trade ministers were in Ottawa to debate reform of the WTO but Parker said he hoped to discuss the wine and dairy cases with his Canadian counterpart while he was there. 

It remained to be seen whether the concessions were enough to address NZ’s concerns.

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