California wine producers claim B.C. liquor reforms violate NAFTA, GATT, and EU-Canada Agreement
The association representing California wine producers has called on Premier Christy Clark to revoke or modify plans to favour the sale of B.C. wines in grocery stores.
In a January 21 letter to the premier, Wine Institute objects to three policies announced last month, claiming that "they violate Canada's international trade obligations including NAFTA, GATT and the EU-Agreement on wine sales".
Tom LaFaille, vice president and international trade counsel of Wine Institute, noted in the letter that the U.S. and Canadian governments work closely through the World Wine Trade Group, the Asia-Pacific Economic Cooperation Wine Regulatory Forum, and the U.S. Tax and Trade Bureau/Wine Institute International Technical Forum.
This is done, he stated, "with the goals of removing discriminatory barriers and facilitating international trade".
"Proposals that raise new barriers to trade, such as B.C.'s initiative, run counter to these important international cooperation efforts and must not be supported," LaFaille wrote. "For these reasons, Wine Institute requests that the initiative be withdrawn or modified to allow for equal access of all wines at B.C. grocery stores."
Specifically, Wine Institute opposes allowing grocery stores to sell 100 percent B.C. wine on designated shelves, starting April 1.
In addition, Wine Institute expressed concerns about the B.C. government's plan to grant a limited number of new licences allowing grocery stores to sell only B.C. wines.
Wine Institute also objects to the government's intention to allow existing VQA stores and independent wine stores to transfer their licences to grocery stores as long as those grocers only sold B.C. wines.
LaFaille pointed out that these licences, which were announced on December 19, are not subject to the "one-kilometre rule", which applies to the sale of private liquor store licences to grocery stores. Under that rule, a licence cannot be purchased by a grocery store if there's another public or private liquor-store licence within a kilometre.
The Straight has left a message with Wine Institute's office in Washington, D.C., to inquire if any California wine producers will challenge the B.C. government's policy under NAFTA. As of this writing, the message hasn't been returned.
Under Chapter 11 of NAFTA, companies can file complaints against the federal and provincial governments and seek compensation if it can prove that its investor rights and protections were violated. A three-member panel of arbitrators issues a ruling and can award an unlimited amount of public funds to the complainant.
In a paper called "Democracy Under Challenge: Canada and Two Decades of NAFTA's Investor-State Dispute Settlement Mechanism", Canadian Centre for Policy Alternatives researcher Scott Sinclair noted that investors do not need consent from their home countries to launch a trade challenge.
"Claimants can challenge government measures that are allegedly unfair or inequitable (NAFTA Article 1105), discriminatory (NAFTA Articles 1102 and 1103), constitute direct or indirect expropriation (NAFTA Article 1110) or apply performance requirements such as local development benefits (NAFTA article 1106)," Sinclair wrote.
Wine Institute's letter stated that California producers represent 90 percent of U.S. wine production and 95 percent of U.S. wine exports.
"More than one hundred U.S. wineries, most of which are small and medium sized enterprises, export their products into the global marketplace, including British Columbia (B.C.) and other Canadian Provinces," LaFaille wrote. "U.S. wine is the largest import category in the B.C. market."
His letter to Clark was copied to Justice Minister Suzanne Anton and her parliamentary secretary, John Yap, as well as to Deputy Premier Rich Coleman and International Trade Minister Ed Fast.
In addition to being premier, Clark is the B.C. Liberal MLA for Westside-Kelowna, which is home to several Okanagan wineries.
For more on B.C.'s wine policies, see "Critics say new B.C. wholesale pricing model will lead to more expensive wine and job losses"
Bad New Laws
Jan 26, 2015 at 3:54pm
I agree with the complaint, if we want to sell our products in the USA, why should we favour BC producers.
Jan 26, 2015 at 4:34pm
im surprised all our alcohol laws don't violate free trade agreement. We should scrap them all and start over
Jan 26, 2015 at 6:21pm
Is our govt made up of idiots? Dont they clear these things with lawyers beforehand?
Jan 26, 2015 at 7:09pm
One former Neo Conservative "Cash Envelope" gave us NAFTA.
The current Neo Con Bot gave us FIPA aka NAFTA for Communist China on Steroids.
Canada is now the most sued up the ass Nation in NAFTA 70%+ of all Cases are against Canada and growing.
Yes you and I Canadians pay Foreign Corporations Judgements against Canada.
Money that could have gone to Canadians HealthCare and Education goes to Corporate Welfare instead.
Now we can look forward to FIPA to pay Communist China "fines" every time Canadians, Provincial or Federal Governments say no to Communist China exploiting any Canadian Resource they want.
And no Canadian Laws or Constitution does not apply to these types of one sided trade contracts.
FIPA for Communist China is determined in a Secret Offshore Tribunal.
see detailed analysis here:
Finally it's a bit rich for foreign Wine producers to tell Canadians where and when they can sell or buy Wine.
I say Fuck Them boycott mass produced California Wines!
Jan 27, 2015 at 12:32am
Looks like the Minister of Injustice, Suzanne Anton and her secretary of insanity, Mr. Yap, forgot to read the fine print. Seriously, who puts these idiots in charge anyway? Oh, I forgot....
Jan 27, 2015 at 8:46am
BC sucks anyway. The only way it has a chance to sell is to eliminate other choices.
Seriously, compare a $20-$40 bottle of BC wine to something from France, Italy or Spain and thats taking into consideration of the import and shipping costs. In reality a $40 bottle of BC wine barely compares to something less then half that from most other major wine producing regions.
Jan 27, 2015 at 10:32am
for a sovereign nation to rescind any trade agreement. It is illegal for China to, for example, invade. If Canada doesn't pay under an international agreement, china cannot lien resources in Canada, especially if Canadian officials are prohibited by law from enforcing foreign judgments under these illegal, irrational international agreements.
Jan 27, 2015 at 10:36am
Anton appears to be really incompetent on this file (just like her predecessor). There has not been a single meaningful consultation on any Liberal initiative and this one is no different. The liquor policy changes have served mostly as a carefully timed announcements producing a smokescreen for much more serious BC Liberals screw-ups, embarassments and scandals. There appears to be no real economic benefit to be found in any of it just tinkering around in the market place and creating distractions.
Thanks for nothing, Christie
Jan 27, 2015 at 10:39am
I generally expect the price of wine to be a bit of a rip-off. I just hope they don't start making the boxes smaller.
Wine seller in WA St.
Jan 27, 2015 at 10:55am
It's unfortunate that the BC government doesn't realize that these kinds of protectionist laws (as well as taxes) actually HURT their local wine industry--both wineries and retailers. My store is about 2 hours south of the border and I get a countless amount of business from Canadian customers look for more selection and better pricing.
I don't mind the business but it is sad because there are taking BC dollars out BC and it is not helping the local BC wineries at all. If anything, the lack of competition severely hinders BC wine because there is little incentive for the wineries to up their quality level.
If (because of limited selection and high prices) a $25 J. Lohr Cabernet is a Canadian customer's benchmark for a premium quality Cab, that is a VERY low mark for a local BC winery to hit to make something better for around the same $20-25. There is little incentive to make anything better when, in reality, that J.Lohr Cab is a very sub-par $10 wine in the eyes of the rest of the world and in markets where that J.Lohr is priced more honestly and has to compete against far superior $10 wines (much less in the $20+), it is just another middle of the pack wine.
BC wineries can do better and BC customers (as well as the local BC economy) DESERVE better. It is just a shame that your government doesn't see that.