1 Introduction

Wine has traditionally been traded goods, but only in the past two decades, the international wine trade has experienced a considerable growth: in the 1960s the exported share of global wine production was 10% and in 1990 this share had reached only 15%. However, by the year 2000 exported production had reached 25% of global production and more than 35% in 2017. More in detail, wine exports were in 2000 about 60 million hectoliters and 17 years later they are higher than 100 million hectoliters. This extraordinary growth suggests that the international wine trade was rather free to expand, without relevant hindrances; indeed, in 2010 the share of export from countries outside regional integrated areas was 60% in value and 52% in volume, with a 6-year increase of about 6 percentage points (in value and volume) (Mariani et al. 2014a).

Nevertheless, the international wine trade, like any other trade, is influenced by barriers which, even though they have not prevented the growth of wine export, have probably contributed to the openness of the different importing markets and to the competitive gaps among exporters, which have driven the complex evolution of international wine flows over last 40 years (Mariani et al. 2012; Morrison and Rabellotti 2017). It is likely that such gaps have derived from a different capacity to lower such barriers in a preferential manner. The understanding of which the trade barriers are and how they operate in the wine markets may, therefore, offer an interesting contribution to understanding how this market evolved over time and to anticipating how it could progress in the future.

Trade barriers result from customs tariffs, the so-called tariff barriers, or from policy measures that can potentially have an economic effect on international trade in goods, changing quantities traded, or prices or both, the so-called non-tariff measures (NTMs) (UNCTAD 2013). According to UNCTAD NTMs may be classified in technical measures, non-technical measures, and export measures.

In the context of a book which has the objective to present the structure of the global wine market, this chapter aims to offer an updated and comprehensive picture of how tariff barriers and NTMs contribute to the definition of the institutional setting of this market. This is done on the base of official documents and reports and of the scientific studies stimulated by the rise of the international wine trade.

This chapter is organized as follows: in Sect. 14.2 the tariff barriers operating in the wine market are discussed and an assessment of the impact of such barriers on the wine export flows is introduced; in Sect. 14.3 a general overview of NTMs is offered, showing how these operate as barriers in the wine sector; in Sect. 14.4 an analysis is done on technical measures, which are the NTMs more frequently resulting in trade barriers; in Sect. 14.5 it is shown how exporting and importing countries reduce the wine trade’s barriers; and, in Sect. 14.6, the events and processes which could modify trade barriers status in the wine market over the near future are presented. Some final remarks, in Sect. 14.7, conclude the chapter.

2 Tariff Barriers

Tariffs are the most visible trade barrier: they cause an increase in importprices and reduce economic welfare for both wine consumers in the importing countries and wine exporters (Dunn and Mutti 2004). The level of tariffs is constrained by the World Trade Organization (WTO) rules: all members are committed to set tariffs at levels (most-favored-nation tariff) above which they cannot be raised any more without compensation to the other countries. Currently the WTO-bound tariffs are the result of the Uruguay Round, seen that the new negotiations, the Doha Round, were considered unsuccessful in 2015 (Financial Times 2015). Applied tariffs may be (and usually are) lower than the bounds, since tariffs may be reduced or cleared in the framework of preferential agreements.

Tariffs on wine may be defined in various ways, as wine is a much differentiated product and may be traded in different container types. Therefore, depending on the importing countries, tariffs on wine could be expressed as ad valorem, with one rate or different rates according to the price level of the product; specifically volume based (per liter); specifically alcohol based (alcoholic strength); and a mix of ad valorem and specific rates. In addition, tariffs can differ by the type of wine (still bottled or bulk, sparkling wine). Specific tariffs based on volume are the most popular in Europe and North America, whereas ad valorem tariffs are the norm in the Asia-Pacific region, with the exception of Japan and Malaysia (Anderson 2010). Table 14.1 shows some examples of tariffs on wine imports.

Table 14.1 Types of tariffs in the international wine trade
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Due to the presence of specific tariffs, evaluating and comparing the level of market protection for wine require complex estimates and specific tariffs should be transformed into the so-called ad valorem equivalent (Babili 2009).Footnote 1

Overall, tariff protection is quite low in countries which have long been involved in the wine trade such as the European Union (EU), the USA, Canada, Australia, and New Zealand (with the notable exception of Japan). By contrast, the tariff level is high in countries which have recently experienced growing wine imports, that is, mainly Asian markets (Anderson 2010; Anderson and Nelgen 2011).

Table 14.2 shows the import duties defined according to the principle of most favored nations for EU. The highest is that applied to sparkling wine, €0.37/liter, while the lowest, which would be applied to low alcohol bulk wine, is only €0, 12/liter.

Table 14.2 EU most favored nations import duties
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All in all, the impact of tariff barriers on the international wine trade is rather small, but not negligible. Anderson and Wittwer (2018) simulated changes in the global wine flows (production, consumption, international trade) from 2014 to 2015 under various scenarios; in the scenario in which all import tariffs on wine were to be removed multilaterally, the value of world wine trade would be 7% greater in 2025 compared to a baseline solution which includes the likely effect of the UK leaving the EU.

3 Non-tariff Measures as Trade Barriers: An Overview

A wide and heterogeneous range ofpolicy interventions other than border tariffs could affect trade costs incurred from producers to final consumer and/or alter conditions of international trade, including policies and regulations that restrict trade and those that facilitate it. NTMs have the potential to distort international trade, whether their trade effects are protectionist or not, and could be applied to imported and exported goods.

For practical purposes, as shown in Table 14.3, NTMs have been categorized by UNCTAD depending on their scope and/or design in 16 chapters (A to P), with each individual chapter divided into groupings with up to three layers of subcategories (UNCTAD 2013). The last chapter includes all the relevant export measures. While the import measures are broadly distinguished as:

  • Technical measures (sanitary and phyto-sanitary measures, technical barriers to trade and pre-shipment inspections) that could serve a legitimate purpose as they are put into place for valid concerns such as food safety and environmental protection

  • Non-technical measures, some of those are manifestly employed as instruments of commercial policy (e.g. quotas, subsidies, trade defense measures, and export restrictions)

Table 14.3 Non-tariff measures classification
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The WTO provides guidelines for the application of NTMs. Overall, focusing on the import measures, the WTO rules indicate that they must be transparent, not overly restrictive to trade or applied arbitrarily. These rules help distinguish legitimate policyregulations and procedures from protectionist measures that may impede trade. In other word, a NTM may be WTO-inconsistent and act as a barrier to trade.

With regard to the wine trade, as well as for all agricultural and food products, sanitary and phyto-sanitary measures (SPSs) and technical barriers to trade (TBTs) are considered those of major concern (Disdier et al. 2007; for a review UNCTAD 2013), and they will be discussed in the next section.

Among the other NTMs, it is worth mentioning for wine, under category F, the internal taxes and charges levied on imports (that have domestic equivalent)—such as consumption taxes (value-added tax [VAT]), excise taxes, and taxes or charges for sensitive products categories (such as tax on packaging for environmental purposes).

Internal taxes on wine are quite different among countries worldwide, as they are implemented for several different aims, such as protectionism of locally produced alcoholic drinks (beer, spirits, etc.), prevention of alcoholism, or environmental reasons (taxation on recycling).

In theory, the level of internal taxes should not generate competitive advantages for wines of different origin and type, as it should only have an effect on the demand size and growth, especially in the lower-income segments of the population, even if for the higher income segments who consider wine as a “status symbol” the opposite may be true (in accordance to Veblen effect, wine demand grows with increasing consumerprices).

In fact, with reference to excise taxes, as they could be implemented in different way (i.e. on volume or on value), the picture is more complex and a competitive advantage could result for certain types of wine. In countries where the excise is applied to volume unit, its incidence is higher for low-priced wines (compared to high-priced/quality wines). Therefore, in these countries the market for low-priced/quality wines could shrink, and both exporters and consumers (low-income segments) of this wine are penalized.

According to the estimate by COGEA (2014), considering the main wine-importing countries, excise duty on volume are particularly high in Singapore, Norway, Australia, and the UK. In contrast, excise duties are on value in China and are not applied in countries such as Hong Kong and Germany. When considering VAT Denmark and Norway apply the highest rate, compared to Japan, the USA, and Singapore, where rates are relatively low (zero in Hong Kong). Finally, Norway and Denmark have implemented a tax on packaging, differentiating respectively in accordance to the type of packaging (bottles or bag-in-box) or the volume (increasing with cl volume).

Finally, it is worth mentioning that other measures such as state trade enterprise (under category H—measures affecting competition) and restriction on resellers (under category J—distribution restrictions) could affect internal market growth, price, and product availability. In some countries like Finland, Norway, Sweden, and Canada, retail sale on wine and liquor is restricted to government-controlled monopoly. Within the monopoly, a procurement board identifies importers and wholesalers for products on the basis of quality, ability to deliver, and price.

In particular, Canada operates under a system of provincial government-controlled liquor control boards (LCBs), and the operation of these monopolies differs from province to province. These LCBs have been contested by the USA as they frequently provide direct and indirect subsidies to Canadian producers. As a matter of fact, British Columbia and Ontario regulations favor the sale of domestic wine by providing additional retail locations, including farmers’ markets and dedicated areas in grocery stores (Wine Institute 2015).

In the USA, there exist two types of state-specific regulations, some even county- or municipality-specific, that are widely considered to be responsible for the demand in domestic and imported wine. The first set of regulations affects the retail availability of alcoholic beverages (whether grocery stores are allowed to sell alcoholic beverages). The second set of regulations affects the distribution—in particular, interstate sales of wine (Rickard et al. 2017).

4 Focus on Main Technical Measures (SPS and TBT)

The most pervasive technical measures affecting wine trade are related to categories A and B, that is, the TBTs and the SPSs. SPS and TBT measures are comprehensive of a wide array of regulations which are different by scope and vary considerably by type (Table 14.4). SPSs include regulations and restrictions to protect human, animal, or plant life or health. TBTs address all other technical regulations, standards, and conformity assessment procedures imposed with a non-trade objective (i.e. to ensure safety, quality, and environmental protection, etc.).

Table 14.4 Import measures: technical measures
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Regardless of whether they are imposed (or implemented) with protectionist intent or to address legitimate market failures, those measures can affect trade, hindering market access or causing an increase in costs and time lost.

In this contest the measures which concern most the wine trade, according to the literature, are the following (Wine Institute 2013, 2015; WFA 2010, 2018; European Commission 2016; USTR 2018; ICE 2010; Battaglene and Milton 2010; Battaglene 2014):

  • Maximum residue limits of agrichemicals—differing between countries both in level and for approved use on products.

  • Oenological practices—in many countries wine production is regulated by oenological rules. This means that it is possible to produce wine using a country-specific set of practices and substances compared to what should be allowed by the Codex Alimentarius.

  • Certification and testing procedures—to access the markets, many importing countries require a complex set of certificates and certification forms, which may not always be justified by the intention of protecting people’s health. Such certification requires considerable effort, resulting in an increase in costs and time lost.

  • Wine labeling regulations—this is an issue of growing concern due to the lack of consistency in standards between countries. As different health warnings and list of ingredients are required, producing a label unique to each country adds a significant additional cost to wine exporters.

4.1 WTO Regulation: SPS and TBT Agreements

SPS measures and TBTs aresubject to WTO regulation under two agreements: the Agreement on Technical Barriers to Trade and the Agreement on Sanitary and Phyto-Sanitary Measures. In brief:

  • Sanitary and Phyto-Sanitary Measures Agreement provides rules on how governments can apply food safety and animal and plant health measures. It applies to essentially all measures taken by WTO members to protect human, animal, or plant life or health from certain risks within its territory and which may affect international trade. In seeking to protect health, WTO members must not apply sanitary or phyto-sanitary measures that are unnecessary, not science-based, and arbitrary or which constitute a disguised restriction on international trade.

  • Agreement on Technical Barriers to Trade is designed to ensure that technical regulations and conformity assessment procedures (testing and certification) do not create unnecessary obstacles to trade.

The main principles behind the regulation of such agreements are summarized in Table 14.5 (WTO 2010, 2014).

Table 14.5 Key elements in SPS and TBT agreements
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Implementation of WTO regulations has given rise to some critical issues for the wine trade. The main issue is that few standards have so far been defined by the Codex Alimentarius, recognized by the WTO as a standard-setting organization while the International Organisation of Vine and Wine (OIV), though an intergovernmental organization committed to establishing technical and commercial standards for wine, is not recognized by the WTO.Footnote 2

It should be noted that the problem of non-tariff barriers could further intensify as some new fast-growing wine-importing countries are setting up wine market regulations. Furthermore, in some of these countries (including China, India, and Brazil), growing interest in domestic wine production could lead to maintaining (or raising) protectionist policies and stepping up support for local producers.

4.2 Plurilateral Initiatives

WTO principles of equivalence and mutual acceptance of rules have been successfully applied by the World Wine Trade Group (WWTG) to ensure an effective reduction of TBTs among the participating countries.Footnote 3 The main achievements of the WWTG can be summarized as follows:

  1. 1.

    The Mutual Acceptance Agreement on Oenological Practices—this agreement eliminates barriers to trade based on differences in oenological practices by establishing that signatory countries will accept that wine made in another signatory country should be allowed to be sold in its market, despite different cross-border winemaking practices. Market access is conditional upon compliance with WTO obligations to protect the health and safety of consumers and prevent deception of consumers. The agreement is a landmark in the development of international trade because it is the first multilateral Mutual Acceptance Agreement, in any field, fully compliant with the WTO’s TBT Agreement.

  2. 2.

    The Agreement on Requirements for Wine Labeling—this agreement addresses barriers to the wine trade by harmonizing labeling requirements, enabling the sale of wine in WWTG markets without having to redesign labels for each individual market. Under the agreement, labels must contain four items of mandatory information, anywhere on a wine bottle label in a single field of vision, such as country of origin, product name, net contents, and alcohol content.

  3. 3.

    The Memorandum of Understanding on Certification Requirements—this aims to reduce trade barriers by encouraging the elimination of burdensome requirements and routine certifications of wine products and ingredients. According to the memorandum, signatories’ certifications regarding wine composition, free sale condition, or analytical reports about the components of imported wines will no longer be required. However, those certifications will still be required if needed to protect human health or safety (like SPS Agreement requirements). Certifications on vintage, grape variety, and appellation will only be needed if there are reasonable doubts about the truthfulness of label representations.

Another important initiative is going on within the Asia-Pacific Economic Cooperation (APEC), the Pacific Rim economic forum made up of 21 members.Footnote 4 In 2008 the Wine Regulatory Forum (WRF) of government officials and stakeholders dedicated to regulatory cooperation and facilitation of the wine trade was launched. The WRF has the following mission: examining options to simplify and harmonize wine regulation across the APEC region, reduce technical barriers to trade, and protect consumers and sharing information and building capacity in wine regulation across the APEC region.

Up to now the WRF has realized five main goals (https://www.wineregulatoryforum.org):

  1. 1.

    To bring transparency to importrequirements for wineexporters—the WRF completed five compendia outlining wine-related requirements in APEC economies covering the following topics: export certificates, food safety and composition, pesticide maximum residue limits (MRLs), labeling, and methods of analysis.

  2. 2.

    To provide regulators with examples of best practices to consider when revisingregulations—the WRF partnered with FIVS-AbridgeFootnote 5 to provide access to the database for wine regulators so they can compare and contrast their requirements against other economies when considering regulatory changes.

  3. 3.

    To reduce the number of required export certificates—as a follow-up to the 2011 WRF dialogue on certification, in 2014 the USA and China developed a consolidated wine export certificate that resulted in a significant reduction of unnecessary certificates issued for trade between those economies. Based upon this work, in 2016 the WRF created a consolidated APEC Model Wine Export Certificate. Chile was the first economy to implement this certificate (which also has become a model in the dairy sector).

  4. 4.

    To educate non-producing APEC economies about wine as a unique food product—the WRF brought regulators to wineries and wine testing laboratories in the USA, New Zealand, Australia, and Vietnam.

  5. 5.

    To increase the accuracy of testing of wine in regulatory laboratories—the WRF is in the third round of wine ring tests and labs are getting hands-on support to help increase precision and accuracy.

5 Free Trade Agreements Relevant to Wine Trade

Over the last decade, in response to the difficulties of the Doha Round negotiations, export-driven countries have chosen the path of bilateral/regional free trade agreements (FTAs) to phase out barriers to trade among the signatory countries. Such agreements facilitate trade but, unlike multilateral agreements, have a discriminatory and trade-distorting effect. On the one hand, these agreements are a way to phase out tariff and non-tariff barriers to trade (thus facilitate trade, the so-called trade creation effect); on the other hand, they create a comparative advantage for those signing them to the detriment of other countries, so-called trade diversion effect (Dunn and Mutti 2004).

There are currently many ongoing negotiations and several trade agreements already signed and it is interesting to analyze those who are most relevant to wine, where there are agreements with countries that have put up high barriers to trade and with the greatest growth potential of imports. Beside the benefits gained from expanding exports, being first on the market and being able to consolidate market position may also allow such countries to drive the evolution of consumer preferences. (This is a major side effect for exporters in new wine-importing markets.)

The scenario is quite complex and in continuous development, with a plethora of different agreements in some way relevant to the wine trade. A glance to the main agreements signed or in discussion (under negotiation) by the main exporters with both traditional wine-importing countries and new emerging markets is given in Table 14.6. To build this general portrait, the primary sources were national government websites, updating previous research (Mariani et al. 2014a, b).

Table 14.6 Wine exporter’s main free trade agreements (FTA)
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Taking into consideration the different types of agreements and the participating countries shown in Table 14.5, some aspects should be highlighted.

The EU has followed a unique approach to the wine sector, signing specific trade agreements with its main trade partners, which are in some cases also competitors (USA 2006; Canada 2004; Mexico 2004; Chile 2002, new 2013; Australia 1994, new 2009; South Africa 2002), with priority being given to protecting geographical indications. Indeed, in these agreements the EU has offered several concessions regarding the reduction of technical barriers (such as recognition of oenological practices and simplified import procedures) in exchange for the protection of GIs.

From 2006, following the strategy outlined by European Commission in its communication Global Europe: Competing in the World (European Commission 2006), the EU has stepped up its efforts in trade negotiations to create free trade areas with regions or countries assigning a central role to the protection of GIs for wines, spirits, and food products (Ahearn 2011). Such efforts have resulted in several trade agreements (European Commission 2018).

As regards traditional importing countries, the EU signed in September 2017 an FTA with Canada, the Comprehensive Economic and Trade Agreement (CETA). In this market the USA, according to the North American Free Trade Agreement (NAFTA), and Chile still have a preferential access. For EUexporters, beside the phase out of tariff and the protection of GIs, otheradvantagesshould be related to the new rules of transparency and simplification applied by liquor control board (European Commission 2014). While the negotiations with the USA on the Transatlantic Trade and Investment Partnership (TTIP) were stopped until further notice at the end of 2016. The USA, Chile, and Australia still have preferential access.

In December 2017, the EU-Japan Economic Partnership Agreement was finalized and on 18 April 2018 it was submitted for approval to EU Member States. According to the agreement, Japan’s tariff on wine imports from the EU will be fully eliminated when the agreement comes into force, thus allowing the erosion of the competitive advantage of Chile that has an FTA in force since 2007 and also to gain a competitive advantage over Australian export that has a more limited preferential access since 2015.Footnote 6

With regard to new emerging markets in Asia, in 2011 the EU signed a FTA with the Republic of Korea of great importance for wine (immediate duty-free access) (European Commission 2010). In this market Chile, the USA, Australia (2014), and New Zealand (2015) also have negotiated a preferential access. Very close to ratification are the agreements signed with Singapore, where Chile, Australia, and New Zealand already have preferential agreements and Vietnam where Australia and New Zealand already have preferential agreements (but with limited commitments to reducing tariffs for wine). However, the negotiations between the EU and India are still in progress, and India’s market protection policy for wine is a major issue between the two parties. In the meantime, India has already signed an FTA with Chile and negotiation is ongoing with New Zealand.

Over time, Australia and New Zealand have negotiated FTAs that phase out tariffs on wine with other Asian countries, such as Thailand and the Philippines. A FTA is in force with the Association of South-East Asian Nations (ASEAN) countries (AANZFTA), overall with limited tariff reduction for wine (or total exclusion for religious or cultural sensitivities such as for Malaysia).

In the Chinese market Chile and New Zealand have got an important advantage over competitors, as both countries (Chile in 2005 and New Zealand in 2008) have signed FTAs. Tariffs on wine imports (14% for bottled wine and 20% for bulk wine) have been progressively reduced, to reach zero in 2012 for New Zealand and, in 2015, for Chile. As a result, Chile and New Zealand have been able to enjoy a significant advantage over competitors (ABARES 2012). Later on, Australia signed a FTA in 2015 where tariffs on wine will be eliminated within four years (from 14% to 11.2% and then by a further 2.8% on January 1 every year until it reaches zero in 2019).

The EU and China, inside the “EU-China 2020 Strategic Agenda for Cooperation”, have concluded in 2017 a bilateral agreement that will result in the protection, against imitations and usurpations, of 100 European geographical indications (of which more than half related to wine) in China and 100 Chinese geographical indications in the EU. Cooperation between the EU and China on geographical indications began over ten years ago, leading to the protection in 2012 of ten geographical indication names on both sides (“10+10” project).

Currently no country has agreements with Russia. (Negotiations were ongoing with New Zealand; however, they were suspended in 2014 following events in the Ukraine.) Russia joined the WTO in late 2011, and while its high wine tariffs are likely to decrease over time, a complex and non-predictable assortment of non-tariff barriers (mainly certification and customs procedures) continues to be the biggest obstacles to entering this market. Recently trade relation between Russia and the main Western countries has become very controversial, as trade sanctions (embargo on imports) have been used for political reasons by western countries supporting the Ukraine, all this in response to Russia’s occupation of Crimea. Starting in 2014, Russia banned some major food products (pork, poultry, fish and seafood, vegetables and dairy products), from the EU, the USA, Canada, Australia, and Norway. After, the embargo was extended to include Albania, Montenegro, Iceland and Liechtenstein, the Ukraine, and Turkey (in October 2016 the embargo on Turkish food was relaxed slightly). Wine up to now has been excluded from retaliation against major exporters,Footnote 7 but Russia has first banned wine imports from Georgia, between 2006 and 2013, and recently (2017) from Montenegro.

The emergence of an increasing number of FTAs between wine-producing countries and emerging consumer markets could change the mid- to long-term dynamics of the global wine market.

Overall it is to be stressed that, among the New World wine countries, Chile has focused much of its marketingstrategy on wine export opportunities (Wehner 2009). As a result of its success in negotiating FTAs, it has obtained preferential market access to the top developed and emerging wine markets around the world. In contrast another important Latin-American wine-producing country like Argentina, after joining the Mercado Común del Sur (MERCOSUR), lost the possibility to sign any FTA on its own. This lack of openness toward international trade, according to Del Bianco et al. (2017), contributes to explain the country’s weak export performance. In addition, it is to be mentioned that Argentina is the only major wine producer to have imposed a 5% tax on the value of exported wines.

Australia and New Zealand have also been very active in negotiations to reach agreements with emerging wine-importing Asian countries. In particular Australia has been able to bridge the gap with other competitors in two major markets such as South Korea and China even though these competitors had already obtained improved access to those markets through their own FTAs (Anderson and Wittwer 2015).

In this scenario, EUexporters without a preferential access to China could continue to face a disadvantage as New World producing countries, thanks to existing trade deals, would be able to consolidate their positions. Overall, the EU has been able to sign several FTAs that allow better access to markets and an increase of GIs’protection for wines.

6 Elements of Change

The current scenario of barriers to international wine trade could undergo some remarkable changes in the near future which could be the result of changes in (i) the international trade policy of some major player on the world scene, or (ii) a more general decision concerning the international positioning of the country, as is the case of Brexit, or, finally, (iii) changes concerning additional requirements that companies have to satisfy, beyond legal requirements, which derive from new consumers’ sensibilities and from retailers’ requests.

6.1 Globalization Process and US “America First”

The world economic globalization process has been governed for a long time by the paradigm of multilateral liberalization following the WTO’s rules. The failure of the Doha round, together with the increase in the economic and political weight of the major developing countries on the international scene, mainly in the Asia-Pacific region, and, more recently, the US President Trump strategy called “America first”, led to more complex and less predictable international relations.

In particular the USA seems to propose moving away from multilateral or regional arrangements with multiple trade partners to bilateral agreements where they can stress more their negotiation strength. Up to now, the USA has withdrawn from the Trans-Pacific Partnership and has requested to renegotiate the North American Free Trade Agreement (NAFTA). Furthermore, they intend to rebalance trade with those countries that experienced the most commercial surplus in respect to the USA, such as China and Germany (ISMEA 2017), and start to increase tariff on some products (steel and aluminum).

In such context, the USA runs a significant deficit in food and agricultural trade with the EU. The threat to apply protectionist measures could have a major impact on EU exports of food products and in particular wine, given its great importance in trade with the USA: EU countries export wine for €10 billion, of which one third is exported to the USA.

Furthermore, the USA contests that the EU’s GIsystem contributes to the asymmetry (trade deficit) in US-EU trade in agricultural products for products subject to the EU’s GI regime.

The Special 301 Report of the annual review of the state of intellectual property protection and enforcement in US trading partners around the world states that “The United States is working intensively through bilateral and multilateral channels to advance U.S. market access interests in foreign markets and to ensure that GI-related trade initiatives of the EU, its Member States, like-minded countries, and international organizations, do not undercut such market access” (USTR 2017, p. 22).

The EUGIagenda remains highly concerning for the USA, for several reasons. In the first place, the EUGIsystem raises concerns regarding the extent to which it impairs the scope of trademark protection, including a respect to prior trademark rights. Secondly, some troubling aspects of the EUGIsystem influence access for the USA and other producers to the EU market. Lastly, EU continues to seek to expand its GI systembeyond its border, through bilateral trade agreements and in multilateral and plurilateral bodies as well (such as the WIPO Lisbon Agreement) which impose the negative impact of the EUGIsystemon market access and trademark protection in third countries.

The USA is trying to fight the EU’s aggressive promotion of its exclusionary GIpolicies through FTAs negotiation, as well as in international forums, including APEC, WIPO, and the WTO. “In addition to these negotiations, the United States is engaging bilaterally to address concerns resulting from the GI provisions in existing EU trade agreements, agreements under negotiation, and other initiatives, including with Canada, China, Costa Rica, Ecuador, El Salvador, Indonesia, Japan, Malaysia, Morocco, the Philippines, South Africa, and Vietnam, among others” (USTR 2017, p. 23).

6.2 UK Brexit

Brexit, the parting of theUK from the EU, is going to modify the international wine trade scenario as the UK is one of the most important players in the wine market. The UK currently represents the first wine consumer market among non-producing countries, the second wine importer in value and volume, and it is also an important re-exporter. Such wine-related trading activities make the UK the home of a flourishing wine business, which is worth about £17 billions. When it quits the EU, the UK will leave a wide regional integrated area and will lose the preferential import and export channels represented by the preferential agreements arranged by EU with several partners. As a consequence, wine imports in the UK (13.5 million hectoliters) and wine exports (about 880,000 hectoliters for a value of €615 million) from the UK will be exposed to barriers higher than today. How this will happen will depend on how the UK will define trade relationship with the EU and other partners. Rollo et al. (2016) suggest that the most practical trade policy for the UK to adopt when leaving the EU is the EU’s tariff schedules previously agreed at the WTO. On the base of this assumption, and under the hypothesis that negotiations for preferential arrangement will take years, Anderson and Wittwer (2017, 2018) have simulated Brexit effects. They forecast that between 2014 and 2025 the growth (in value) of the UK’s wine consumption and import will be 9% instead of 24%, warning, though, that it will be the slower income growth to make a smaller wine market in the UK in 2025 than would otherwise have been the case. As a matter of fact, the import duties applied in their simulations are the small ones indicated in Table 14.2, which can play only a minor role.

Anderson and Wittwer’s simulations assume a smooth transition in the technical aspects of trade between the UK and the EU. But this is a worrying issue for the wine business community. In October 2017 the most important bodies representing traders and producers in the UK and Europe signed a joint declarationFootnote 8 urging “the EU and the UK to agree to a gold standardagreement that preserves wine and spirit tariff-free trade and fair competition” and calling “for predictable, pragmatic, non-disruptive transitional implementation arrangements, allowing businesses to continue trading in the knowledge that the rules will not change at all without a phase-in period”. Indeed, the joint declaration highlights several matters that may endanger trade flows between the UK and the EU after the transition period, generating relevant trade barriers, which involve rules concerning oenological practices, labeling, intellectual property rights protection and in particular GI protection, custom practices, and people movements. Also in the case of Brexit, therefore, NTMs will be the true variables which will determine trade flow evolution.

6.3 Private Standards

Last but not least, it should be stressed that the international wine trade is constrained not only by national technical regulations resulting in non-tariff barriers but also by private standards. In the last decade there has been an intense development of private standards, mainly targeting, initially, food safety (often exceeding requirements established in international standards developed by the Codex Alimentarius) and in recent years mainly related to social and environmental aspects. Such standards can be set by individual firms (usually large retailers), collective national organizations, or international standards organizations. Private standards are voluntary, but if required by large retailers and/or large companies they become de facto mandatory for suppliers. Such standards do not fall within the rules of the WTO. Indeed, these standards area matter of increasing concern for all the effects that they may have upon access to international markets, especially for small businesses (Henson and Humphrey 2009). Private standards, therefore, may operate as barriers which will discriminate not among countries but among types of firms or supply chains.

Concerning social and environmental standards, in most wine-producing countries specific initiatives were developed to measure, communicate, and, in some cases, certify the compliance of wineries with principles of sustainable development, that is, environmental, social, and economic sustainability (Flores 2018; Merlo et al. 2018; Mariani and Vastola 2015). The scope was to make available to wine producers a simpler and more focused standard compared to ISO standard as ISO 14001 (environmental management) or ISO 26000 (corporate social responsibility). Despite the lower administrative burden of such wine-specific standards, the compliance with their prescription could be difficult for some actors and, in some circumstances, for all actors in specific areas resulting in relevant trade barriers (Pomarici et al. 2015; Jourjon et al. 2016). Moreover, the compliance with such standards, in case of not-integrated supply chains (bottlers purchasing wine or winery purchasing grape) may have serious consequences on the overall chain’s governance and on the linkages among the participants (Cafaggi 2016). As a matter of fact, in order to guarantee final product compliance with the desired set of requirements, the lead firms have to apply a strict control upon the whole upward supply chain. Therefore this compliance asks for specific contracts between participants to the supply chain, sometimes international,Footnote 9 which may influence both the forms and the functions of the chains, and that may result in new barriers to trade. As a matter of fact, regulatory provisions related to social responsibility and sustainability expand the scope of contracting along the chain from the exchange (of products or services) to the regulation (of the process) and produce changes in the contractual relationships between participants, that is, the leader chains and the suppliers and eventually their subcontractors.

7 Final Remarks

Previous paragraphs show that the international wine trade has to overcome a complex variety of barriers, deriving from import duties and, more often, from NTMs. As a matter of fact, wine exports to some markets are still hampered by high tariffs and regular wine export faces a variety of technical barriers related to the particular characteristics of this alcoholic product, which is obtained with production practices often subject to rules and regulated by specific labeling systems.

In this scenario, the object of negotiations is a push to negotiate bilateral agreements, to reduce the impact of tariff and non-tariff barriers which affect wine trade. In negotiating these agreements, each exporting country targets specific issues to protect the distinctive elements of their offer and, in so doing, distorting and diverting effects are generated. It is not easy to assess the effects of preferential access to the markets on export flow changes, because the competitive performance is determined by many factors (e.g. exchange rate, marketing effort) but scientific studies demonstrate the discriminatory effect of preferential agreements (ABARES 2012) and the heterogeneous impacts on trade of technical measures (Dal Bianco et al. 2016).

Considered the elements of change discussed in Sect. 14.6, in the future the impact of tariff and non-tariff barriers could become even stronger and in such perspective it would be useful to renovate the commitment for a non-discriminatory reduction of non-tariff barriers at the very least. As Codex Alimentarius does not cover many relevant concerning issues (and it is not likely that something will change), it would be desirable to increase the role of OIV, eventually with an official recognition of this organization by WTO.

Concluding, what looks worth highlighting is that the rules concerning the wine’s international trade act as barriers but also, as far as NTMs are concerned, act as drivers of specific behavior, which are relevant elements of the global wine market’s institutional settings. As a matter of fact, such rules, beyond the discriminatory effects that may operate locally, are likely to support the consumers’ trust, which is the key element of a fair progress in a globalized wine market.