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15 October 2020 — OIV life

Wine should not be held to ransom!

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In response to the latest development in the Airbus-Boeing trade row that places the USA and EU on opposite sides, the Director General of the OIV has called for wine to be excluded from retaliatory measures.

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On 13 October 2020, the World Trade Organization (WTO) published its arbitration decision on the Boeing subsidy dispute. This ruling allows the European Union to request authorisation from the WTO’s Dispute Settlement Body (DSB) to take countermeasures with respect to the United States to the maximum total amount of 3,993,212,564 USD per year.

The 13 October decision echoes the permission the WTO granted the United States a year ago to raise tariffs on European products by 7.5 billion USD.

The 16-year battle is linked to the national subsidies received by the two airplane giants, Airbus and Boeing. The parties do not believe the estimated damages to both sides over the course of the trade war can be compensated for solely through measures concerning aircraft construction and trade. As such, sanctions have been authorised for other products. Wine has thus become a bargaining chip in a quarrel that it has seemingly little to do with.

The sanctions taken by the United States last year as part of the same dispute have already had a severe impact on the European wine sector. The 13 October decision opens up several avenues of negotiation to the two parties. One option is an escalation of new retaliatory measures. In actual fact, the United States is still a long way from reaching the 7.5 billion USD authorised last year, and the European Union now has the option to begin rolling out a plan for sanctions of up to nearly 4 billion USD. Another approach is that of dialogue and the release of products not directly related to the dispute from negotiations.

Although this fight between the two giants demonstrates the importance of wine for the economies involved, the OIV is calling for this opportunity to be seized and all necessary efforts made to re-establish free market conditions for wine.

The Director General of the OIV, Pau Roca, reiterated that “the wine sector has been hit hard by the COVID-19 crisis throughout the world and it has also been impacted by events linked to climate change”. He called for “every effort to be made at all levels to limit stressors and work towards facilitating recovery.”