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   Share this article     Summary of Editorial column Wine Tasting 
  Editorial Issue 192, February 2020   
USA and European Union: a Clash Between Wine, Taxes and TariffsUSA and European Union: a Clash Between Wine, Taxes and Tariffs  Contents 
Issue 191, January 2020 Follow DiWineTaste on Follow DiWineTaste on TwitterIssue 193, March 2020

USA and European Union: a Clash Between Wine, Taxes and Tariffs


 The introduction of tariffs by the United States of America on European Union products – news being in the limelight for several weeks now – is producing the first effects and unfortunately they are not positive. The consequences of this measure are beginning to produce the first tangible effects and, understandably, trade associations and institutions are trying to take precautionary measures in order to limit their impact. Everyone agrees the consequences of tariffs will be evident and substantial, of course, this will also have an impact in the world of wine. In fact, in some European countries, the first effects on the economy of the sectors affected by this measure, which are evidently negative, begin to produce their impact. In particular, France is already complaining of a double-digit drop in wine exports to the United States of America.


 

 The first European countries to suffer the consequences of the introduction of this protectionist measure are France and Spain. These two countries, in fact, have announced they have recorded significant decreases in the export share to the United States of America. France, at the end of November 2019, recorded a decrease of -36% compared to the same period of 2018 while Spain announced the loss can be determined with a drop of -9.2%. In both cases, this loss is believed to be largely determined by the decision to introduce tariffs by the US and which led to a significant drop in exports after five years. To take advantage of this result, even marking an increase in exports to the United States of America, are Italy and New Zealand, respectively with increases of +9.7% and +8.8%. The determination of the drop due to the effects of the tariffs seems to be possible if we consider the percentage imposed on French and Spanish products.

 If it is true France and Spain seem to have suffered a heavy loss and, at the same time, Italy would have good reasons to rejoice for the consequent increase in exports – due to a lower percentage of tariffs – in reality, no one in Europe has really good reasons to be happy for. In fact, most producers fear that in the coming months the effects of the tariffs will be even more evident for everyone, including Italy. The Italian wine sector, fearing a rather important impact in the coming months, are seeking the political support of the Government, inviting Italian politicians to take action in the appropriate European Union offices in order to promote proper measures capable of limiting the expected losses. It definitely is a difficult task and, evidently, it is not only in the interest of Italy as all the member countries of the European Union are trying to understandably do the same. An obviously complex and difficult undertaking, by also considering – above all – the reasons that led the United States of America to introduce tariffs on European production.

 At institutional and bureaucratic level, in fact, something is moving, as even the American trade associations understand the economic consequences caused by the tariffs. The Comité Européen des Entreprises Vins (Ceev) and the American Wine Institute have in fact entered into a union of intent with the aim of asking their respective governments to the bilateral revocation of tariffs on wine, as required by the GATT (General Agreement on Tariffs and Trade). The clear demonstration the provision of tariffs imposed by the USA raises many concerns for all the figures and associations depending on wine market, both in Europe and in the United States of America. Furthermore, the mutual concern is also the fear for the most direct consequence determined by the lack of profit, that is the concrete risk of job losses and, not least, the unavoidable increase of wine prices in the US market.

 On both sides – the European Union and the United States of America – there is a clear conviction of the need for free trade in order to favor the respective wine production to be present in the markets of others. It is not difficult, in fact, to think the introduction of tariffs by the US government will cause a similar response from the European Union. A scenario far away from the times we are living and which increasingly sees the world as a global and unique market, in which the expression of local products can be appreciated elsewhere, while maintaining – each of them – its own identity and peculiarities. The result is the defeat of all because if the sale of European wine is hindered in the United States of America, the American one will likewise be hindered with similar measures in the European market. At the end everyone will lose, everyone will be poorer and not only in economic terms but, above all, in terms of sharing and cultural growth.

 France, the country that suffered the worst consequences of the introduction of US tariffs, did not stand by and moved to the counterattack. The French government, in fact, which was expecting the application of high tariffs on its products, has responded by introducing the so-called digital tax against the American giants of the web. This measure has forced the American government to deal with the French one, and it seems they reached a “truce” and which, apparently, will continue throughout 2020. It certainly does not end here and it is too easy to imagine – by considering what the two opposite sides of the Atlantic ocean are doing – that other measures will be adopted in order to limit the marketing opportunities of the respective productions. As for European wine and commercial relations with other countries, it does not end here as – it seems so – the brexit is about to be implemented with consequences that are still not entirely clear. This, of course, will lead to new clashes between institutions and bureaucracy, with the result the world will suddenly seem to us more closed, smaller and more fragile.

Antonello Biancalana



   Share this article     Summary of Editorial column Wine Tasting 
  Editorial Issue 192, February 2020   
USA and European Union: a Clash Between Wine, Taxes and TariffsUSA and European Union: a Clash Between Wine, Taxes and Tariffs  Contents 
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