December 18, 2001

The Office of the United States Trade Representative announced that the governments of the United States, Canada, Australia, Chile and New Zealand signed today in Toronto the Mutual Acceptance Agreement (MAA) on Oenological (winemaking) Practices. This wine trade agreement is a major development that promotes greater international wine commerce and eases trade barriers for U.S. wine, particularly for California wine which accounts for more than 90 percent of U.S. wine production.

"This agreement is a breakthrough for world wine trade that recognizes the effectiveness of other country's regulatory and enforcement systems for assuring that producers comply with its country's standards," said John De Luca, president and CEO of the Wine Institute in San Francisco. "We hope other countries will participate in the agreement and liberalize wine trade."

Under the agreement, each country will permit the importation of wines from every other signatory country as long as these wines are made in accordance with the producing country's domestic laws, regulations and requirements on oenological practices. The agreement recognizes that different countries use different winemaking practices due to local conditions, climatic variations and traditions, and that grapegrowing and winemaking practices are constantly evolving. These practices have been used as reasons to prevent market access and obstruct international wine trade. The U.S. already allows wine imports if they meet another country's standards, but this agreement ensures that participating trade partners give U.S. wines the same conditions. The signatories believe that, for countries with strong mechanisms in place to regulate winemaking, mutual acceptance is the optimal way to facilitate wine trade.

In other provisions, the agreement will establish transparency requirements and consultation and dispute mechanisms. The agreement does not limit signatories' rights or obligations under the World Trade Organization Agreements, including the right to take measures for the protection of human health and safety. Future work includes negotiation of a wine labeling agreement that will simplify export labeling.

Argentina and South Africa participated in the negotiation of the agreement, and have the option to sign it prior to March 31, 2002. Other countries can accede to the agreement under the procedures and conditions established in the agreement.

The U.S. is the fourth largest wine market for imported wine in the world, and is the fourth leading producer of wine worldwide. Accounting for a five percent share of the world export market, the U.S. exported $560 million in 2000. Of this, wine exports to Canada were $105 million; Australia, $510,000; New Zealand, $284,000; and Chile, $121,000.