Not to be lost in all the excitement this week about the removal of federal barriers to direct-to-consumer wine shipping in Canada is the news that Australia and Canada have reached an agreement “to remove discriminatory measures impeding Australian wine sales in British Columbia.”
Australian media is reporting that the two countries reached agreement this week. Details were not made available, although it appears that the part of Australia’s WTO challenge addressing BC wine-in-grocery has now been resolved. Australia’s WTO wine trade challenge against Canada will continue for now, as negotiations continue in respect of other provinces.
With the scant information provided in the article, we can infer three items of significance from this development:
The contents of the Australia-Canada agreement will form the template for settlement with the United States, in fulfilment of the Side Letter to the USMCA committing B.C. wine-in-grocery to be resolved by November 1, 2019. (It is safe to assume that under WTO trade rules Australian wines will not be treated differently than American wines on B.C.’s grocery store shelves.) As to timing, now that we know a settlement has been reached with Australia, it implies that a deal may well be reached - and announced - sooner than later with the U.S. as well.
Even though the article discusses wine-in-grocery, the Australian WTO challenge went well beyond that issue, citing direct delivery for B.C. wine and an array of tax measures in four provinces that Australia viewed as discriminatory against its country’s wines. A settlement with B.C. that forms a “very useful precedent” according to the Australian Minister for Trade, Tourism and Investment is undoubtedly a settlement that in some way addresses the other irritants raised by Australia at the WTO. Will B.C. wineries keep or lose direct delivery?
The structure of settlements with other Canadian wine-producing provinces will also impact their domestic schemes for taxation and distribution, which have been alleged to constitute preferential treatment of their domestic wine industries.
Change is coming to how wine is sold in Canada, amid pressure from the domestic industry and international producers. Consumers should be the winners, with greater market access to Canadian and international wines.