After 20 years, the EU has finally agreed a wine trade treaty with the US but European producers fear that too much ground has been given, particularly with regard to the protection of places of origin. Alan Osborn reports.

More than 20 years after an agreement was first proposed, a deal has been struck between the European Union (EU) and the US over wine. But there have been complaints from Champagne, Port and Sherry producers among others that the agreement represents a missed opportunity to make progress on the protection of European denominations of origin.

The deal has yet to be approved by the EU Council of Ministers and although no EU country has threatened to block it, given the level of dissatisfaction there could be some hitches. Indeed, the European Parliament has gone as far as to say, in a recently passed resolution, that the deal is merely "an initial, insufficient and inadequate step towards international recognition of the EU's protected traditional names".

In sharp contrast, the Americans have been almost unreservedly bullish about the future following the deal. Nancy Light, director of communications at the Wine Institute in San Francisco, said: "It really addresses some of the problems we've had with American wines going into the EU which is our major export market. It will make people feel more comfortable and more sure about the long term market prospects there." However, Light flatly rejected the idea that the EU had come out worse. "I think there were important concessions on both sides and there will be important gains on both sides," she said.

Basically the deal allows US exporters to sell in Europe wines produced using oenological methods banned for EU winemakers, such as practices like adding malic acid to correct deficient acidity (common in California) and the use of oak wood chips during ageing. In return, the agreement commits the US to limiting the use of 16 specified "semi-generic" terms, such as Champagne, Burgundy, Port and Sherry, as well as retsina, to existing brands, banning their use for new brands. These limitations would apply to the US home market, where these terms are used generically by US producers, and some overseas markets that also allow the use of these terms by non-EU producers, including some Caribbean countries, but not Canada.

The deal also allows US producers to use regulated terms like "château, late bottled vintage, noble, superior and vintage character" under specified conditions and even for a limited period of time in the EU market. Furthermore, US wine sold in the EU may name a single variety of grape or place of origin on the label only if 75% of the wine is derived from grapes of that variety or from that place.

One main irritation for some European producers, however, is the acceptance of "grandfather" concessions that allow American producers to continue using existing names. This is a compromise between the die-hard producers of Port, Sherry and Champagne, who insist that these names are specific geographic regions in Portugal, Spain and France which have been hi-jacked by the Americans, and the latter who say their products are clearly marked as being of US origin, have been used for decades in some cases and have been heavily promoted, sometimes to the benefit of the originals.

And whilst it is hard to belittle the concerns of many wine producers in the EU where origin is a major selling asset - producer Bruno Paillard of Reims said it was "shocking" that vintners other than those from the Champagne region might put that name on their labels - generally there is agreement amongst European producers that the deal is well worth having. This is because since 1989 the wine trade between the EU and the US has rested on a makeshift short-term arrangement that have been renewed annually by the Council.

"You cannot build a trade relationship on the basis of a renewal of the derogation every year," said Marion Wolfers, secretary general of the Comité Européen des Entreprises Vins, the European wine producers association. "The whole security of the trade was dependent on this annual decision by the Council on the derogation. We were fed up with it and the US was fed up with it.

"The Americans said there was no way they would allow the derogation arrangement any more and we accepted that - we export seven times as much to the US as they do to us," she said. "It's clear that all the problems haven't been solved but what has been solved is that the security of the trade has been guaranteed. This agreement is much stronger than the arrangement which preceded it and we are happy with that even though we would have liked more."

However, she warned this deal is far from being the end of the matter, given the need for more talks to sort out important outstanding problems. These will include a permanent solution on 'geographical indications' as well as any other outstanding issues. The target date for a supplementary agreement is two years from ratification of the latest deal. Also, a joint committee on wine issues is to be set up to handle differences instead of referring disputes to the World Trade Organisation.

So there is work still to be done. Ms Wolfers said: "We are happy that there is a strong commitment to go ahead with further negotiations but if these fail then the whole deal could fail", she predicted, even warning of a potential "trade war" as a worst-case scenario.