Trade Agreements Alcohol Industry

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    Tariffs reduce world wine trade by 1.6%, mainly due to lower wine imports to the United States. U.S. wine exports are also declining, with U.S. consumers turning away from more expensive imported wines in favour of domestic brands. Most of this loss in the world wine trade (more than $300 million per year) is still French wine. Spain`s net export loss was $98 million, compared to $19 million in Germany. These destination countries reduce their exports to the United States by much more than these amounts, but expand their exports to other countries, increasing competition elsewhere. Learn more about international studies on illegal trade and counterfeiting. The same forces of globalization have reduced the cost of consumer information and contributed to international tourism by changing preferences for exotic products. Together, they have led not only to a rapid increase in the share of global consumption of alcoholic beverages (Anderson and Pinilla 2018), but also to the rapid growth of Asia`s share of this consumption (Chart 1).

    Tags: tariffs, international trade, alcohol, imports, exports, Brexit, United Kingdom, Italy, New Zealand, Germany, Chile, South Africa, Australia, Argentina, EU, trade war, trade war, United States, Trump Under the auspices of the WTO, there has been some movement towards harmonization and mutual recognition. Bilateral agreements, such as the US-EU agreement on wine trade, have also taken the same direction. However, these efforts have not been entirely effective or unregring. For example, few wine standards have been set. In recent years, beverage markets have been disrupted by a plethora of influences. In addition to sugar taxes on soft drinks and increased sales of water bottles, alcohol markets have changed significantly. The following example illustrates another important aspect of protectionism applied to beverages. On the production side, they are considered an agricultural product (for wine) or as a product (for spirits). All politicians want to be seen defending their farmers and producers. On the consumption side, however, alcohol is a luxury, not a necessity. This makes “sin taxes” more politically tastier than other sources of income. In the past, when commercial costs were high, consumers concentrated their alcohol consumption on beverages that could be produced locally at the lowest cost.

    These models have been reinforced by taxes on beverage consumption and imports, which vary considerably by beverage types (Anderson 2020a). There are often taxes to protect local producers, thus reinforcing the climatic differences between countries in mixing the drinks consumed. Brexit has already had an undecided impact on markets, as sterling has depreciated by more than 10% since the June 2016 referendum and growth in incomes, household consumption and business investment has slowed. Other impacts on beverage markets in the UK and elsewhere will depend on the UK`s post-Brexit policy decisions, including its trade deals with many trading partners in third countries, alongside the EU. European spirit drinks are often confronted with national excise systems that favour spirit drinks produced domesticly in violation of Article III of the GATT (General Agreement on Tariffs and Trade). The WTO`s dispute resolution body reviewed four excise systems on spirit drinks (Japan, Korea, Chile and the Philippines) and found that each excise tax applied to domestically produced spirits than imported spirits, thereby providing domestic industry with protection contrary to GATT rules. Health and plant health measures (SPS) and other technical barriers to trade (OTC) are also frequent protectionism instruments. “With tariffs reduced, calls for protectionism have created new