Trade Policy

The Issue

Free and open trade is vital to the American grape and wine industry, and major impediments to trade in the wine sector could have devastating consequences for American wineries and grape growers nationwide.

Background

WineAmerica and Winegrape Growers of America have long advocated for the reduction of trade barriers that hinder American wineries’ ability to export to new international markets. With the Trump Administration withdrawing from the Trans Pacific Partnership we have focused our sights on modernizing the North American Free Trade Agreement (NAFTA), which is a priority of the Administration.

NAFTA Benefits for Wine

Worldwide exports of American wine now exceed $1.62 billion. NAFTA and the 1987 Canada-U.S. Free Trade Agreement have dramatically stimulated U.S. wine exports to Canada, increasing from $10.9 million in 1987 to $431 million in 2016.Canada is now the #1 export country for American wines, with California the most popular imported table wine category in that country. U.S. wine exports to Mexico, our 7th largest export market, have increased from $6.9 million in 1994, when NAFTA took effect, to nearly $24 million in 2016.California wine represents 85 percent of U.S. wine production and 90 percent of U.S. exports, contributing over $114 billion annually to the U.S. economy and generating 786,000 jobs nationwide.

Opportunities

The 1993 passage of NAFTA and the passage of the 1987 Canada-U.S. Free Trade Agreement (CUSFTA) have provided the climate for great growth within the Mexican and Canadian wine markets.  However, some adjustments need revising in the renegotiated NAFTA as it pertains to wine:

• End NAFTA Prohibition on Duty Drawback
• End Discriminatory Benefits Provided to Canadian Wineries in British Columbia and Ontario
• End Canadian import mark ups.