International trade is again at the forefront of Washington policymaking as it is one of the few issues that the Obama administration and the incoming GOP-controlled Congress are believed to be able to agree upon in the next two years.
The issue has enormous implications locally, especially for the North Coast’s multibillion-dollar wine industry. A bottle of port wine at the Pedroncelli Winery in Geyserville provides a perfect example of the repercussions that these high-stakes diplomatic negotiations can have, especially as American and European negotiators try to increase market access and beat back attempts at each other’s protectionism.
The family-owned Pedroncelli Winery has produced its port since 1990, now up to 800 cases. It uses four separate grape varietals — tinta madeira, tinta cao, touriga nacional, and souzao — from its own vineyards. Those types of grapes have been traditionally grown in Portugal for the dessert wine, as opposed to a more common fruit like zinfandel that is used by other vintners. That provides Pedroncelli port a greater cachet in the marketplace. A 2008 Four Grapes Port retails for $19 on its website.
“We had the opportunity to plant many things on our property … but we found that they (port varietals) grow beautifully on our property,” said Julie Pedroncelli St. John, vice president of marketing for Pedroncelli Winery. “It gives us a diversity in our wine selections.”
But the winery could be forced to strike “port” from its name if the Europeans get their way. In May, the European wine industry indicated that it wanted to add new restrictions to the landmark 2006 wine agreement between the United States and European Union, which allowed American vintners to continue using 16 semi-generic wine names — such as port, chablis and champagne — but only on their existing brands. It banned the use of those names on wine labels introduced after March 2006.
“In this framework, the EU wine sector should not settle for a conservative and defensive approach, but quite the opposite, adopt an offensive position in order to maintain — if not increase — its market shares and commercial outlets. We should look forward, not backwards,” Jean-Marie Barillère, president of the European Wine Companies Committee, said in a statement.
That tone got noticed in the U.S. industry, which wants to retain American vintners’ rights to continue using wine terms that some have placed on their labels for more than a century.
“It’s a nonstarter for us,” said Tom LaFaille, vice president and international trade counsel for the Wine Institute, the California industry’s main lobbying group. “There are U.S. wineries that go as far back as the 1800s that have been using these names. There have been millions of dollars (spent) in promoting the brands. … In some respects, the American wineries are doing much more than European producers to introduce these products to American consumers.”
An international debate
The debate is playing out as the Obama administration is in talks with 11 other countries in the Asia-Pacific region on the Trans-Pacific Partnership to lower trade barriers and establish new frameworks for labor, environmental and intellectual property agreements.” It’s also working on a related pact with the European Union called the Transatlantic Trade and Investment Partnership, though those negotiations are expected to be more contentious and on a slower pace.