Traditional EU wine regions, such as Champagne, have been officially recognised by Australia under a newly signed wine trade agreement.

The treaty, signed last night (1 December), means Australia has agreed to phase out the use of European wine regions certified as EU Geographical Indications, such as Champagne, Burgundy and Rioja.

In return, the European Commission has pledged to recognise more winemaking techniques and simplify labelling rules for Australian producers.

The new deal updates an initial wine trade agreement signed in 1994.

Mariann Fischer Boel, European agriculture commissioner, said that protection of traditional wine producing regions in the EU was of "utmost importance".

Stephen Smith, Australia's minister for foreign affairs, said that the new deal could be a "win-win". He said: "For Australian producers it means simpler recognition of wine making techniques and simpler labelling requirements."

Under the new deal, Australia will still be able to use certain terms on wine, such as "vintage", "cream" and "tawny".