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
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