The U.S. Wine Industry and Selected Trade Issues with the European Union

Summary

Global wine production totaled roughly 27 billion liters in 2012. The European Union (EU) dominates world production, accounting for nearly 60% of all wine produced each year. France, Italy, and Spain are among the principal EU wine-producing countries. The United States is the world's second-largest wine-producing region, accounting for 10% of global production. The value of world trade in wine totaled more than $21 billion in 2013. The EU accounted for nearly 60% of the world's export market for wine, valued at $12 billion in 2013. Other exporting nations include Australia, Chile, the United States, New Zealand, Argentina, and South Africa.

The United States is a major exporter of wine with about 7% of global exports in 2013. The U.S. wine industry has identified a range of international barriers to trade that may be limiting U.S. wine exports abroad. These include import tariffs; foreign wine producer subsidies and support; preferential market access, such as free trade agreements between the EU and other countries; incompatible foreign wine composition standards; and a range of miscellaneous non-tariff barriers, such as state or provincial government monopolies, import licensing and customs clearance requirements, and wine labeling regulations. An annual report by the Wine Institute, an advocacy group representing the California wine industry, highlights a range of trade concerns with several EU countries and other countries worldwide.

To address trade concerns with the EU, the United States and the EU signed the U.S.-EU Agreement on Trade in Wine ("2006 Agreement") in March 2006. The 2006 Agreement addressed a range of issues regarding wine production, labeling, and import requirements and was intended to establish predictable conditions for bilateral wine trade. Among the key provisions in the 2006 Agreement were measures regarding the U.S. industry's use of 16 "semi-generic" names of wine that originate in the EU (including Sherry, Chablis, and Chianti) as well as the use of certain traditional labeling terms (such as Chateau and Vintage). The EU also agreed to accept all current U.S. winemaking practices and to establish a process to approve new practices. Despite this agreement, ongoing trade concerns include geographical indications (GIs) and "semi-generic" terms; market access issues regarding "traditional" terms; new winemaking practices, and related technical issues; and issues related to "regulatory coherence" (especially testing and certification). GIs refer to geographical names that act to protect the quality and reputation of a distinctive product originating in a certain region. The term is most often applied to wines, spirits, and agricultural products.

Discussion of these and related trade issues continues to be an issue within ongoing U.S. trade negotiations in both the proposed Trans-Pacific Partnership (TPP) and the proposed Transatlantic Trade and Investment Partnership (T-TIP). One of the principal goals of the U.S. wine industry is to maintain the 2006 Agreement. There are two views within the U.S. wine industry: wineries represented by American Viticulture Areas (AVAs) would like to see additional protection for regional names, including the 16 semi-generic terms, while certain brand owners and the Wine Institute are concerned that such a move would end the legal use of terms that are associated with certain brands today. Recently concluded trade agreements between the EU and other third countries, such as Canada and South Korea, also have complicated the debate because provisions in these agreements will provide full protection of GIs and not defer to a country's independent assessment of generic status for key product names. Such protections for GIs could require U.S. food and wine exports to these non-EU countries to not use certain "semi-generic" or "traditional" terms. These and other issues continue to influence discussion in both the T-TIP and TPP negotiations.

Overview

This report provides an overview of issues pertaining to the U.S. wine industry within ongoing U.S. trade negotiations in the proposed Trans-Pacific Partnership (TPP) and the proposed Transatlantic Trade and Investment Partnership (T-TIP). The report is organized in two parts. The first part provides an overview of global wine production and trade, focusing on the role of the United States within the industry. The second part provides an overview of reported barriers to trade for U.S. wine exporters, and describes some of the issues that are reportedly being discussed as part of the ongoing TPP and T-TIP negotiations that could influence market access, regulations, and rules related to wine trade. Given the magnitude of wine trade between the United States and the European Union (EU), much of the discussion in this report focuses on U.S. wine trade issues related to the EU.

A few introductory comments are worth noting. There is some disagreement among countries over what constitutes "wine." For example, the EU defines wine as only those beverages made by fermenting grapes. In the United States, wine is defined more broadly to include beverages produced by fermentation of any fruit (grapes, peaches, pears, etc.). European table wine generally contains between 9% and 15% alcohol. In contrast, U.S. table wine generally contains between 7% and 14% alcohol.¹

Estimates of total exports and imports presented here are from data reported in the Global Trade Atlas, and totals may not match up precisely due to possible transshipments²⁰ en route, and/or data inconsistencies by the reporting country. These estimates exclude intra-EU trade, and do not reflect trade among EU members and also possible transshipments to final destinations in neighboring or outside countries.

Major export destinations for EU wine include the United States (28%), Switzerland (10%), Canada (9%), Japan (9%), China (9%), Hong Kong (7%), Russia (6%), and Singapore (3%).²¹

Source: Global Trade Atlas data for HS 2204, Wine of Fresh Grapes.

The Wine Institute's 2013 trade barriers report also highlights a range of country-specific concerns in multiple countries, including several EU countries, Argentina, Australia, Barbados, Bermuda, Brazil, Canada, Cayman Islands, Chile, China, Colombia, Ghana, Hong Kong, India, Indonesia, Israel, Japan, Jordan, South Korea, Macau, Malaysia, Mexico, New Zealand, Nigeria, Norway, Panama, Peru, Philippines, Russia, Singapore, South Korea, Switzerland, Taiwan, Thailand, United Arab Emirates, and Vietnam.

Other market and trade concerns have been highlighted by the Napa Valley Vintners trade association. These include concerns regarding counterfeit and inferior imitation wines, such as falsely labeled products—including the use of fraudulent geographical indications (GIs)—trading on established brand names (e.g., "Napa Valley" wines).²⁶ This constitutes both an intellectual property rights violation and a violation of laws governing GIs. (As discussed later, GIs refer to internationally protected designations of a product's origin and characteristics.)

The Office of the U.S. Trade Representative (USTR) also has raised concerns about potential trade barriers associated with GI protections. According to USTR: "The United States continues to have serious concerns with the EU's system for the protection of GIs [geographical indications], including with respect to its negative impact on the protection of trademark and market access for U.S. products that use generic names."²⁷ USTR's annual National Trade Estimate Report on Foreign Trade Barriers report highlights related country-specific concerns for a number of EU countries, as well as other types of trade concerns related to wine in other countries (including high tariffs and market controls on wine and spirits).

For example, tariffs and taxes charged on U.S. exports are among the cited trade concerns involving the EU wine market. The average EU common external tariff on wine ranges from €0.13 to €0.32 per liter of wine.²⁸ In U.S. dollars, this equates to about $0.18 to $0.43 per liter of wine. By comparison, U.S. wine imports range from about $0.04 to $0.22 per liter of wine.²⁹ The Wine Institute's 2013 annual report provides additional detailed discussion of trade barriers facing the U.S. wine industry in other markets.

Finally, a report by the U.S. International Trade Commission (USITC) further notes some of the broader trade barriers to U.S. wine exports.³⁰ Domestic barriers to U.S. wine exports include a lack of resources dedicated to relatively small-scale production and a lack of focused support for small- and medium-sized wine producers in the U.S. market. Foreign barriers to U.S. wine exports include high tariffs and high levels of support provided by competitor nations, as well as various compliance issues, particularly regarding sanitary and phytosanitary (SPS) requirements³¹ and labeling regulations, and also the need for further marketing and promotion of U.S. wines in foreign markets and longer contract terms abroad.

In addition to concerns from general trade barriers reported by U.S. wine exporters, the U.S. wine industry is also concerned about the status of provisions under its existing bilateral agreement on wine in the U.S.-EU Agreement on Trade in Wine ("2006 Agreement"), which was signed in March 2006.

Following years of negotiations, the United States and EU concluded the 2006 Agreement, which addressed a range of issues regarding wine production, labeling, and import requirements and was intended to establish predictable conditions for bilateral wine trade. The 2006 Agreement replaced the temporary, short-term exemptions the EU had been renewing since 1983 to allow the importation of U.S. wine made using practices not recognized by EU regulations.³²

As outlined by the U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB) within the U.S. Department of the Treasury, the 2006 Agreement's major provisions include the following.³³

• 1. Use of "Semi-Generic" Terms: The United States agreed to seek legislative changes to limit the use of 16 "semi-generic" names of wine that originates in the EU, including Sherry, Chablis, and Chianti (see full listing in text box, and further discussion of "geographical indications" in the next section). The United States enacted such changes in December 2006.³⁴ This amended the Internal Revenue Code of 1986 (26 U.S.C. 5388[c]) and defined each semi-generic name as a name of geographic significance that is also a designation of class and type for wine. Existing uses of these names on non-EU wine were permitted to continue, allowing for the grandfathering of existing uses on a label that was approved before March 10, 2006 (effective date of the Agreement), but new brands were prohibited from using these names on non-European wines.
• 2. Winemaking Practices: The EU agreed to accept all current U.S. winemaking practices, including those that were not currently approved for use in the EU and those for which they had been granting temporary exemptions, once the legislative changes described in (1) were made. Some of the current U.S. practices and ingredients that were previously not accepted by the EU included lactic acid; malic acid; reverse osmosis for alcohol reduction; reverse osmosis for removal of off flavors; ion-exchange; spinning cone column; fluid milk; and Half and Half. The 2006 Agreement also established a process for both parties to approve new winemaking practices.

Under the 2006 Agreement, the EU also agreed to recognize all requested U.S. names of origin and to simplify EU import certification form (VI1), including self-certification and electronic submission of the form (where possible). The United States was also granted the ability to export to the EU wines with over 15% alcohol. The 2006 Agreement further stipulated that U.S. wine sold in the EU may be labeled with certain terms referred to as "Traditional Expressions," including Chateau and vintage (see the following text box for a full listing of these terms).³⁵

"Traditional Expressions" Labeling Terms

Chateau

classic

clos

cream

crusted/crusting

late bottled vintage

fine

noble

ruby

superior

sur lie

tawny

vintage/vintage character

The first phase of the 2006 Agreement provided for broad agreement on trade in wine between both parties and a framework for continued negotiations. The second phase of the 2006 Agreement was intended to address other issues, such as the use of traditional terms and also the use of GIs (see discussion below). Since the signing of the Agreement in 2006, both the United States and the EU have continued to meet regularly and to conduct negotiations, but a range of issues remain unresolved.³⁶

Trade concerns related to the 2006 Agreement, discussed in the following sections, include³⁷

• geographical indications (GIs) and "semi-generic" terms;
• market access issues regarding "traditional" terms;
• new winemaking practices, and related technical issues; and
• issues related to "regulatory coherence" (especially testing and certification).

Some of these concerns—particularly those involving GIs and the ability of U.S. winemakers to use certain "semi-generic" or "traditional" terms—not only involve wine trade between the United States and the EU, but might also involve U.S. wine trade with some third countries. For example, Canada and South Korea recently concluded trade agreements with the EU, and certain provisions in those agreements have raised concerns among U.S. winemakers because they provide for the protection of GIs in these countries. A country's independent assessment of generic status for key product names will not be accepted. Such protections could restrict U.S. exports to these non-EU countries of some wine and food products that use certain "semi-generic" or "traditional" terms.

GIs are geographical names used to identify products where a particular quality, characteristic, or reputation of the product is attributable to the place identified by the geographic name. The term is most often, although not exclusively, applied to wines, spirits, and agricultural products.³⁸ Examples of GIs include Parmesan cheese and Parma ham from the Parma region of Italy, Tuscan olive oil, Roquefort cheese, Champagne from the region of the same name in France, and Irish whiskey. Other examples are Darjeeling tea, Ceylon tea, Florida oranges, Idaho potatoes, Vidalia onions, Washington State apples, and Napa Valley wines.

The use of GIs has become a contentious international trade issue, particularly for U.S. wine, cheese, and sausage makers. GIs are protected intellectual property pursuant to agreements of the World Trade Organization (WTO) (see box below) and U.S. law. However, laws and regulations governing GIs differ between the United States and EU, which results in conflicting views on whether generic or semi-generic terms can be protected as GIs.

The EU's GI system for wine consists of two types: (1) Protected Denomination of Origin (PDO) regarding "quality wines produced in a specified region" and (2) Protected Geographical Indication (PGI) regarding "table wines with geographical indication."³⁹ Both systems establish geographical names for certain products that originate in the region of which they bear the name. Both require a registration process, and both establish certain controls and intellectual property protections for GI products.⁴⁰ Differences between the two types pertain to particular product attributions, such as a product's reputation, its linkages to the geographical environment, number of production steps, and origin of raw materials used in production, among others. EU regulations addressing GIs in wine products are in Council Regulation (EC) No. 1234/2007, as amended.⁴¹

Geographical Indications in the WTO, United States and the European Union

WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)

The TRIPS Agreement defines GIs as "indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin." (Article 22.1) Under the TRIPS Agreement, member countries have committed to providing a minimum standard of protection for GIs (i.e., protecting GI products to avoid misleading the public and to prevent unfair competition) and an "enhanced level of protection" to wines and spirits that carry a geographical indication, subject to certain exceptions.

U.S. Trademark Laws Regarding GIs

In the United States, GIs are geared toward brands and trademarks, and protected under the U.S. Trademark Act (15 U.S.C. §1051 et seq.). Section 4 of the Trademark Act (15 U.S.C. §1054) provides for the registration of "certification marks including indications of regional origin." The U.S. Patent and Trademark Office (PTO) defines GIs as "indications that identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographic origin." According to the U.S. PTO, "geographical indications serve the same functions as trademarks, because like trademarks they are: source-identifiers, guarantees of quality, and valuable business interests." Establishing a product based on its geography can be complicated, either involving establishing a trademark or a brand name through an extensive advertising campaign. PTO does not have a special register for GIs in the United States. Its trademark register, the Trademark Electronic Search System (TESS), contains GIs registered as trademarks, certification marks, and collective marks. These register entries are not designated with any special field (such as "geographical indications") and cannot be readily compiled into a complete list of registered GIs.

EU Regulations Regarding GIs

In the EU, protection of GIs is geared toward location and tradition. A series of regulations governing GIs was initiated in the early 1990s covering agricultural and food products, as well as wine and spirits. The regulations protect product names from misuse and imitation of agricultural products for which an intrinsic link exists between the product or foodstuff's characteristics and geographical origin. Under EU regulations, producers qualify for either a "protected geographical indication" (PGI); a "protected designation of origin" (PDO); or "Traditional Specialties Guaranteed" (TSG). Product registration markers for these three quality schemes are intended to help protect product names from misuse and imitation. PDOs cover "agricultural products and foodstuffs which are produced, processed and prepared in a given geographical area using recognized know-how." PGIs are similar with the exception that "at least one of the stages of production, processing or preparation takes place in the area." TSGs differ in that they highlight "traditional character, either in the composition or means of production." EU regulations include Council Regulation (EC) No. 1151/2012 and 510/2006 (agricultural products and foodstuffs); Council Regulation (EC) No. Regulation 1234/2007 and 479/2008 (wine); and Council Regulation (EC) No. 110/2008 (spirits).

In the case of wine, the GI registration process is conducted via the EU's "E-Bacchus" system. E-Bacchus is a database which consists of the "Register of designations of origin and geographical indications protected in the EU" in accordance with EU's GI regulations for wine.⁴² E-Bacchus also lists GIs and names of origin for products from non-EU countries that are protected in the EU in accordance with bilateral agreements on trade in wine between the EU and other non-EU countries (including the United States), and lists the traditional terms protected in the EU under its GI regulations for wine.

Napa Valley Vintners and other groups representing regional wine industries are generally less concerned with European efforts to phase out the use of semi-generic terms in the U.S. industry. As a matter of policy, these groups would like to see greater protection for their regional names (e.g. Napa Valley, Sonoma County, etc.) and believe that any path to achieving that result hinges on U.S. acceptance of a policy that protects all regional terms, regardless of their semi-generic status.⁴⁶

Sanitary and phytosanitary (SPS) measures are laws, regulations, standards, and procedures that governments employ as "necessary to protect human, animal or plant life or health" from the risks associated with the spread of pests, diseases, or disease-carrying and -causing organisms or from additives, toxins, or contaminants in food, beverages, or feedstuffs. Technical barriers to trade (TBTs) cover both food and non-food traded products. TBTs in agriculture include SPS measures, but also include other types of measures related to health and quality standards, testing, registration, and certification requirements, as well as packaging and labeling regulations.

Both SPS and TBT measures regarding food safety and related public health protection are addressed in various multilateral trade agreements and are regularly notified to and debated within the World Trade Organization (WTO). International trade rules recognize the rights and obligations of governments to adopt and enforce such requirements. These rules are spelled out primarily in two WTO agreements:

• Agreement on Sanitary and Phytosanitary Measures ("SPS Agreement"), which resulted from the Uruguay Round of the General Agreement on Tariffs and Trade (GATT); and
• Agreement on Technical Barriers to Trade ("TBT Agreement"), which also resulted from the Uruguay Round of GATT negotiations as a revision of the agreement of the same name that emerged from negotiations during the Tokyo Round that concluded in 1979.

As part of ongoing trade negotiations, a final report submitted by U.S. and EU trade officials as part of the so-called U.S.-EU High Level Working Group on Jobs and Growth (HLWG) to advise the Transatlantic Trade and Investment Partnership (T-TIP) negotiations recommended that the United States and EU seek to negotiate both an "ambitious 'SPS-plus' chapter" and an "ambitious 'TBT-plus' chapter."

The HLWG recommendations call for:

• 1. an "ambitious 'SPS-plus' chapter, including establishing an ongoing mechanism for improved dialogue and cooperation" to address bilateral SPS issues by building on key principles of WTO SPS Agreement, including "requirements that each side's SPS measures be based on science and on international standards or scientific risk assessments, applied only to the extent necessary to protect human, animal, or plant life or health, and developed in a transparent manner, without undue delay."
• 2. an "ambitious 'TBT-plus' chapter, building on horizontal disciplines in the WTO [TBT Agreement], including establishing an ongoing mechanism for improved dialogue and cooperation for addressing bilateral TBT issues," including the goals of "greater openness, transparency, and convergence in regulatory approaches and requirements and related standards-development processes ... , to reduce redundant and burdensome testing and certification requirements, promote confidence in our respective conformity assessment bodies, and enhance cooperation on conformity assessment and standardization issues globally."

The "SPS Plus" and "TBT Plus" concept generally means building on and going beyond the rights and obligations of all WTO members through the WTO's SPS and TBT Agreements. For example, this could mean that the EU and United States would provide for greater transparency and more timely SPS and TBT notifications than required by the WTO, along with—albeit more challenging—some form of "rapid response mechanism" for resolving stoppages of agricultural products at the border and adopting enforcement mechanisms or a dispute settlement process.

Source: HLWG, "Final Report of the U.S.-EU High Level Working Group on Jobs and Growth," February 11, 2013. These recommendations were submitted to the Presidents of the United States, European Council, and European Commission. See also CRS Report R43450, Sanitary and Phytosanitary (SPS) and Related Non-Tariff Barriers to Agricultural Trade.

The U.S. wine industry generally supports the TPP negotiation, with the following objectives: (1) retain provisions in existing agreements related to wine and grape juice concentrate; (2) obtain the longest phase-out possible for U.S. tariffs on wine from New Zealand; and (3) obtain immediate tariff elimination for wine and grape juice concentrate in Vietnam and Brunei.⁶⁴

High-end producers in the Napa Valley and in other fine wine-producing American Viticulture Areas are more focused on protecting their brand integrity from counterfeit and imitation wines, and are actively seeking ways to register their GIs in other countries.⁷² In addition to supporting more robust GI protections in the United States, they are actively pursuing a multilateral "wine registry" as a way to "protect international GIs and fill the gaps left by the domestic legal schemes."⁷³ It is hoped such a registry—covering each country's existing and also any newly registered GIs or trademarks—would help prevent disputes and provide a forum for dispute resolution regarding intellectual property protection, as well as further expand the TRIPS Agreement's objectives. To facilitate implementing a wine registry, "they prefer to see the semi-generic fight resolved in favor of the EU through T-TIP because they believe that this issue has been the major stumbling block that has prevented the completion of a multilateral negotiation to establish an international register for wine GIs."⁷⁴ This rift between winemakers could influence the T-TIP debate.

USTR continues to consult with the U.S. Congress on a range of issues within both T-TIP⁷⁵ and TPP⁷⁶ negotiations. Both USTR and Congress have conducted public hearings on these negotiations and have consulted with key constituents. Members of Congress also continue to weigh in on a range of issues pertaining to these negotiations, including some of the issues addressed in this report.

In particular, GIs and SPS/TBT issues continue to be addressed as part of the ongoing TPP and T-TIP negotiations, but under different trade chapters. GIs may likely be included in a discussion of intellectual property rights (IPR), whereas SPS and related regulatory issues may likely be included as part of either an Agriculture chapter or a chapter on Regulatory Coherence issues. These discussions are ongoing.

Footnotes

CRS discussions with USDA Foreign Agricultural Service (FAS) wine marketing experts.

HTS refers to the U.S. import classification system for determining customs duties (tariffs) for goods imported into the United States, administered by the U.S. International Trade Commission (USITC).

"Must" refers to the expressed juice of fruit (especially grapes) before and during fermentation, as well as the pulp and skins of the crushed grapes.

USITC, HTS Chapter 22, "Beverages, Spirits, and Vinegar." HTS 2009 is defined as "Fruit juices (including grape must) and vegetable juices, not fortified with vitamins or minerals, unfermented and not containing added spirit, whether or not containing added sugar or other sweetening matter."

Vermouth and other wine of fresh grapes flavored with plants or aromatic substances (HTS Chapter 22).

Other fermented beverages such as cider, perry (fermented pear beverage), and honey mead, including mixtures of fermented beverages or mixtures with non-alcoholic beverages, not elsewhere specified or included (HTS Chapter 22).

The EU was initially composed of six countries and called the European Community. To date, the number of EU countries has expanded to 28 members. For more information, see CRS Report RS21372, The European Union: Questions and Answers.

Global Trade Atlas data (2013).

Data are also expressed in hectoliters (HL), which equal 100 liters; 10 HL is approximately 1 metric ton.

Statistics posted at the Wine Institute's website, at http://www.wineinstitute.org/resources/statistics. Limited data are available for 2012 across all countries. Totals for 2012 are from the Wine Institute, International Trade Barriers Report for U.S. Wines, 2012.

Wine Institute, International Trade Barriers Report for U.S. Wines, 2012.

Statistics posted at the Wine Institute's website, at http://www.wineinstitute.org/resources/statistics. Limited data are available for 2012 across all countries. Totals for 2012 are from the Wine Institute, International Trade Barriers Report for U.S. Wines, 2012.

USDA, "EU-28 Wine Annual Report and Statistics," GAIN Report IT1414, February 20, 2014.

On an individual country basis, the United States ranks fourth in overall wine production, following France, Italy, and Spain.

Statistics posted at the Wine Institute's website, at http://www.wineinstitute.org/resources/statistics. Bonded winery licenses are issued by the U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB) within the U.S. Department of Treasury for the purposes of designating a tax-paid environment for wine.

Wine Institute, "California Wine Sales Grow by 3% by Volume and 5% by Value in the U.S. in 2013," April 24, 2014.

Global Trade Atlas data by Harmonized System (HS) convention for HS 2204, Wine of Fresh Grapes.

J. Ferreira and G. Ferreira, "International Wine Trade between the U.S. and EU—An Overview," April 2014.

"Transshipment" refers to the transfer of a shipment from one carrier/vessel to another for further transit and delivery of cargo to its final destination (and may sometimes be intended to hide the identity of the port or country of origin).

USDA, "EU-28 Wine Annual Report and Statistics," GAIN Report IT1414, February 20, 2014. Market shares are based on 2012 data (excluding intra-EU trade).

Global Trade Atlas data by Harmonized System (HS) convention for HS 2204, Wine of Fresh Grapes.

Wine Institute, International Trade Barriers Report for U.S. Wines, 2013.

The Wine Institute represents more than 1,000 wineries and affiliated businesses throughout California.

Wine Institute, International Trade Barriers Report for U.S. Wines, 2013.

J. Boyd, "Brands at Risk: How Wineries Exporting to China Protect Their Intellectual Property," Wines & Vines, August 2013. See also "Questions for the Record for Committee on Ways and Means Full Committee Hearing on President's Trade Policy Agenda with Ambassador Michael Froman," July 18, 2013.

USTR, 2014 National Trade Estimate Report on Foreign Trade Barriers, p. 111.

Wine Institute, International Trade Barriers Report for U.S. Wines, 2013. The EU is a customs union with a common external tariff that is imposed by all member states.

HTS Chapter 22, "Beverages, Spirits, and Vinegar." HTS 2204 is defined as "wine of fresh grapes, including fortified wines; grape must."

USITC, Small and Medium-Sized Enterprises: U.S. and EU Export Activities, and Barriers and Opportunities Experienced by U.S. Firms, Investigation No. 332-509, USITC Publication 4169, July 2010.

SPS measures are the laws, rules, standards, and procedures that governments employ to protect humans, animals, and plants from diseases, pests, toxins, and other contaminants. For additional information regarding SPS trade issues, see CRS Report R43450, Sanitary and Phytosanitary (SPS) and Related Non-Tariff Barriers to Agricultural Trade.

TTB, Industry Circular#2006-1, March 10, 2006, http://www.ttb.gov/industry_circulars/archives/2006/06-01.html.

P.L. 109-432, §422(b). The legislative changes do not apply to wine containing less than 7% or more than 24% alcohol by volume, or to wine intended for sale outside the United States.

TTB, "US/EC Wine Agreement Q&A's," http://www.ttb.gov/wine/itd_qas.shtml.

J. Grueff, Achieving a Successful Outcome for Agriculture in the EU–U.S. Transatlantic Trade and Investment Partnership Agreement, International Food & Agricultural Trade Policy Council Discussion Paper, February 2013.

Comments submitted by JBC International on behalf of the Wine Institute, the California Association of Wine Grape Growers, and WineAmerica to the Office of the U.S. Trade Representative (USTR) (Docket number USTR–2013–0019); and Wine Institute Remarks by Tom LaFaille, "TTIP Opportunities and Challenges for the U.S. Wine Sector," T-TIP Stakeholder Forum, May 21, 2014.

For other general information, see CRS Report IF00016, Geographical Indications in U.S.-EU Trade Negotiations (In Focus).

L. Berlottier and L. Mercier, "Protected Designations of Origin and Protected Geographical Indications," European Commission (EC), Agriculture and Rural Development presentation, November 16, 2010.

EC, "EU System for Geographical Indications for Agricultural Products and Foodstuffs."

EC, Agriculture and Rural Development: http://ec.europa.eu/agriculture/markets/wine/index_en.htm.

E-Bacchus website: http://ec.europa.eu/agriculture/markets/wine/e-bacchus/index.cfm?language=EN.

EC presentation, "EU System for Geographical Indications for Agricultural Products and Foodstuffs."

Wine Institute's Tom LaFaille, "TTIP Opportunities and Challenges for the U.S. Wine Sector," May 21, 2014.

Comments submitted by JBC International on behalf of the Wine Institute, the California Association of Wine Grape Growers, and WineAmerica to USTR (Docket number USTR–2013–0019).

CRS communication with representatives of Napa Valley Vintners Association, February 26, 2015.

Ibid. For more detailed information on the April 2009 INTA proposal to create a multilateral system of notification and registration of GIs for wines and spirits under TRIPS, see http://www.inta.org/Advocacy/Documents/INTAProposalforMultilateralGIRegister.pdf.

U.S. Patent and Trademark Office (PTO), "Geographical Indication Protection in the United States," http://www.uspto.gov/web/offices/dcom/olia/globalip/pdf/gi_system.pdf.

AOPA, What We Stand For, http://www.aop-us.org/what-we-stand-for.html.

N. Potenza Denis, "Industry Speaks Up as GI Talks Continue in DC," Specialty Food News, June 5, 2014.

AOPA, Current Members, http://www.aop-us.org/current-members.html.

Comments submitted by JBC International on behalf of the Wine Institute, the California Association of Wine Grape Growers, and WineAmerica to USTR (Docket number USTR–2013–0019).

Wine Institute's Tom LaFaille, "TTIP Opportunities and Challenges for the U.S. Wine Sector," May 21, 2014.

CRS communication with representatives of Napa Valley Vintners Association, February 26, 2015.

Ibid.

Comments submitted by JBC International on behalf of the Wine Institute, the California Association of Wine Grape Growers, and WineAmerica to USTR (Docket number USTR–2013–0019).

Technical barriers to trade (TBT) cover technical regulations, product standards, environmental regulations, and voluntary procedures relating to human health and animal welfare. For additional information regarding SPS and TBT trade issues, see CRS Report R43450, Sanitary and Phytosanitary (SPS) and Related Non-Tariff Barriers to Agricultural Trade.

Comments submitted by JBC International on behalf of the Wine Institute, the California Association of Wine Grape Growers, and WineAmerica to USTR (Docket number USTR–2013–0019).

HLWG, "Final Report of the U.S.-EU High Level Working Group on Jobs and Growth," February 11, 2013. These recommendations were submitted to the Presidents of the United States, European Council, and European Commission. See also CRS Report R43450, Sanitary and Phytosanitary (SPS) and Related Non-Tariff Barriers to Agricultural Trade.

See U.S. Chamber of Commerce's website, http://www.uschamber.com/issues/regulatory/precautionary-principle.

Letter to USTR Michael Froman from Members of the House Agriculture Committee and House Ways and Means Committee, August 7, 2013. See also "Ways & Means, Ag Committee Members Demand SPS Enforceability," Inside U.S. Trade, September 5, 2013. For more information on these trade negotiations, see CRS Report R43387, Transatlantic Trade and Investment Partnership (T-TIP) Negotiations and CRS Report R42694, The Trans-Pacific Partnership (TPP) Negotiations and Issues for Congress.

U.S. Wine Industry Submission to USTR and Public Hearing Concerning Proposed Trans-Pacific Partnership Free Trade Agreement, from Jim Clawson, JBClawson International, March 10, 2009.

CEEV is known by its French abbreviation, CEEV (Comité Européen des Entreprises Vins); http://www.ceev.be.

CEEV, "The European Wine Companies (CEEV) Ask for an Ambitious T-TIP Deal Improving the Wine Trade with the U.S.," July 16, 2014.

CEEV, "The European Wine Companies Committee (CEEV) Supports in Washington an Ambitious Wine Chapter in the EU/USA T-TIP Negotiations," May 21, 2014.

See, for example, comments submitted by JBC International on behalf of the Wine Institute, the California Association of Wine Grape Growers, and WineAmerica to USTR (Docket number USTR–2013–0019); and Wine Institute Remarks by Tom LaFaille, "TTIP Opportunities and Challenges for the U.S. Wine Sector," T-TIP Stakeholder Forum, May 21, 2014.

CRS communication with representatives of Napa Valley Vintners Association, February 26, 2015.

Letter to Michael Froman, Deputy National Security Advisor for International Economic Affairs, from several U.S. Members of Congress and U.S. agricultural groups, December 20, 2012. See also CCFN, "CCFN and Allies Urge U.S. White House to Handle EU GI Discussions with Care," January 9, 2013.

CRS communication with representatives of Napa Valley Vintners Association, February 26, 2015.

Ibid.

L. Zanzig, "The Perfect Pairing: Protecting U.S. Geographical Indications with a Sinoamerican Wine Registry," Washington Law Review, vol. 88, no. 2 (June 2013), pp.723-757.

"TTIP Debate over Semi-Generics Highlights Rift Among U.S. Winemakers," Inside U.S. Trade, August 14, 2014.

The Obama Administration formally notified Congress in March 2013 that it was entering into negotiations with the EU, launching the U.S.-EU trade talks. For more general information on T-TIP, see CRS Report R43387, Transatlantic Trade and Investment Partnership (T-TIP) Negotiations.

Former President Bush notified Congress of his intention to negotiate with members of the Trans-Pacific Strategic Economic Partnership (Singapore, New Zealand, Chile, and Brunei) in September 2008, and with other countries, Australia, Peru, and Vietnam, on December 2008. For more general information on TPP, see CRS Report R42694, The Trans-Pacific Partnership (TPP) Negotiations and Issues for Congress.