After almost 20 years of talks, US and European Community (EC) negotiators have announced an agreement on key provisions of the wine trade.

The agreement addresses key wine trade issues including recognition of winemaking practices, recognition of US place names in Europe and the use of semi-generic names. The deal would also bar US winemakers from using famous names such as Champagne, Burgundy and Chablis on new wine brands.

It is the first phase of a broader agreement intended to promote trade between the US and the European Community, which are major growth markets for one another's exports.

The Wine Institute, whose members export 95% of US wine, issued a letter to James Murphy, assistant US trade representative who led the negotiations on behalf of the US government, acknowledging "outstanding progress on wine trade issues of critical importance to the growth of our industry."

"The US has the most open wine market in the world," said Robert P. 'Bobby' Koch, president and CEO of the Wine Institute, "and European winemakers have long enjoyed unfettered access to US consumers. This agreement promises US wineries a level of certainty that our wines will have long-term access to European markets such as the United Kingdom where consumers have embraced wines from California and other states."

For European wine producers, who exported US$2.3 billion worth of wine to the US market last year, the agreement ensures continued access to its top destination and a major growth market - the U.S. is on course to become the world's largest wine consumer by 2008.

Among the key provisions of the new agreement of interest to California wine exporters is full recognition of US winemaking practices which previously required renewed approval or "derogations" on a regular basis in order for U.S. producers to ship to Europe. Most of the practices covered by this agreement are currently permitted in Europe for wines from countries such as Australia and South Africa that currently have trade agreements with the European Community.

Also of importance to US producers is a provision in the agreement that calls for a new system to recognise US wine place names. The agreement calls for the EC to recognize the names of states, AVA's (American Viticultural Areas) and counties with AVA's.

Finally, the agreement addresses a long-running discussion about the use of place names of concern to some European producers. The use by US winemakers of names such as Chablis, Burgundy, Port and Champagne, called semi-generics, have been in dispute for a number of years.

US winemakers have been legally permitted to use a group of 16 specific semi-generic terms on labels if accompanied by an adjacent appellation of origin. The new agreement allows for the continued use of these terms on existing brands but not new brands, thereby addressing European concerns without diminishing the rights and investments that current US brand owners have made in these terms over many decades.

"This agreement provides American wine producers with assured long-term access to our top export markets and removes a major impediment to future growth," said Eric Wente, chairman of Wente Vineyards, who is also chairman of the Wine Institute and long-time head of its International Committee. "It is a welcome first step in levelling the playing field for our industry."