The Losh Cause
Oh boy, did Europe get its derriere kicked by the US in the recent trade accord. Twenty years of the sort of picky negotiations that would have tried the patience of Henry Kissinger have finished with, let's be frank, a crushing victory for the Americans.
On the plus side, at least no-one's under any illusions as to the severity of the thrashing administered by the Americans. While Robert Koch, president and CEO of the Californian Wine, described it as 'outstanding progress', the Centre for Wine Origins morosely called it a 'missed opportunity', while Champagne producer Bruno Paillard fumed that it was 'an absurdity on a moral point of view.'
All are correct. The Americans got everything they wanted - recognition of their Viticultural Areas (AVAs), guaranteed free access to European markets for wines made with techniques banned in the EU, and only a token concession on the use of semi-generic wine names. While existing wine brands already using Chablis, Champagne etc can continue, it will be forbidden for new brands to use them.
To which the European response has, understandably, been 'big deal'. No wonder that a number of growers associations in France have, not unreasonably, requested that the deal be thrown out by the EU's 25 agriculture ministers and renegotiated.
So how did the Americans pull off such a one-sided agreement; one which amounts not so much to an accord as a railroading?
The answer may well lie in the longevity of the negotiations themselves. When the EU first sat down with the US team, the American wine industry may not have been a huge exporter, but nor was the States a big importer either. Since then, however, the wine marketplace has changed out of all recognition, with millions of bottles zipping across the Atlantic in both directions. The stakes have been raised.
The Europeans have plaintively pointed out that the US wine industry is now big enough and mature enough to stand on its own two feet without 'borrowing' names from abroad to sell its wine. But that actually misses the point. It's not the size of the American wine industry that's the issue here: it's the size of the US market.
Wine sales in Europe might be flat, with traditional markets in decline and once-booming arrivistes in low single-digit growth. But America, by contrast, is on a roll.
According to market analysts Vinexpo, the US has grown nearly 20% over the last few years and, while it's already the world's biggest market by value, if current trends continue, it will also be the world's biggest volume market as well by 2008. In three years time, Vinexpo predict that the US will be spending as much on wine as France, Germany and Italy put together.
Now, gather those facts together and you end up with a pretty powerful negotiating tool. No-one who's serious about exports can afford to harm their chances in the States, and you can bet that the Americans know it.
Were there dark mutterings from the US side about potentially making things difficult for European imports should the EU negotiators try to play hardball? Nobody is saying, but it wouldn't be the first time. Only a couple of years ago, Port got caught up in a diplomatic spat between the two trading blocs over, of all things, bananas and threatened with punitive tariffs. Could the same thing have happened this time?
Officially, the answer is 'no'. But given the total capitulation of the European negotiating team, it's hard not to conclude that they were the victims of some pretty serious sabre-rattling. In wine as in geo-politics, the US is now the undisputed number one, and when the giant chooses to flex its muscles, the world's growers will know about it.
The big worry for Europe's growers must be that, if their negotiators are no longer able to stand their ground on such fundamental issues as the misuse of semi-generic terms, which have been sacrosanct for over 20 years, then who knows what other sacred principles might have to be sacrificed to preserve open access to the US market.
This accord was a bad defeat for Europe, but it may turn out to be even worse than her growers ever suspected.
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