The original post was updated on May 26, 2018. The Trump Administration has requested that the World Trade Organization (WTO) establish a dispute settlement panel to examine unfair regulations governing the sale of wine in grocery stores in the Canadian province of British Columbia (BC). The United States held consultations with Canada in 2017, but those consultations did not resolve the dispute. Requesting the establishment of a panel is the next step in the WTO dispute settlement process (4).
The US trade dispute regarding the exclusive sale of BC Wine on grocery store shelves continues to boil!
October 17, 2017 – This is the second request filed by the United States regarding the wine sale measures. The first request for consultations was filed by the United States on 18 January 2017. You can find the background information on the dispute by reading my earlier post here.
The United States has requested World Trade Organization (WTO) consultations with Canada regarding measures maintained by the Canadian province of British Columbia governing the sale of wine in grocery stores. The request was circulated to WTO members on 2 October. The complaint¹ is as follows “The BC wine measures provide advantages to BC wine through the granting of exclusive access to a retail channel of selling wine on grocery store shelves. The BC measures appear to discriminate on their face against imported wine by allowing only BC wine to be sold on regular grocery store shelves while imported wine may be sold in grocery stores only through a so-called “store within a store.”
What is a request for consultations?
The request for consultations formally initiates a dispute in the WTO. Consultations give the parties an opportunity to discuss the matter and to find a satisfactory solution without proceeding further with litigation. After 60 days, if consultations have failed to resolve the dispute, the complainant may request adjudication by a panel.
U.S. Wine Exports
Canada is a significant market for California wine exports. U.S. wine exports², 90 % from California, reached a record $1.62 billion in winery revenues in 2016. Volume shipments were 461 million litres or 51.2 million cases. The European Union’s 28-member countries were the top market for U.S. wine exports, accounting for $685 million; followed by Canada, $431 million; Hong Kong, $99 million; Japan, $87 million; China, $82 million; Mexico, $24 million; South Korea, $23 million; Switzerland, $19 million; Singapore, $14 million; and Philippines, $13 million.
BC Government Response
The Deputy Minister of Jobs, Trade and Technology response of October 24th can be seen in the comments sections below.
It is interesting that in January 2017, the then BC NDP Liquor Policy Critic and now Attorney-General responsible for Liquor Policy, David Eby suggests this trade dispute was a predictable outcome³. “It’s really obvious to everybody who’s looked at it that what the provincial government has done is illegal under trade policy,” he suggests. “Either it was part of their plan that it would be challenged and then cheap international wine could be put in grocery stores, or they naively hoped that the US would simply look the other way and ignore this.”
BC Wine enthusiasts can only hope that BC Wine is not used as a bargaining chip by the BC and Federal Governments in the current NAFTA trade negotiations with the US.
References
- United States files second WTO complaint over Canadian wine sale restrictions
2. 2016 California Wine Sales in U.S. Hit New Record: 238 Million Cases with Retail Value of $34.1 Billion
3. US launches trade action against Canada over BC wine
4. United States takes action against Canadian trade measures that discriminate against U.S. wine