The US is fighting Canada over wine, and the EU wants a seat at the table

  • The EU and Argentina have asked to be witness to negotiations between Canada and the U.S. over British Columbia's regulation of wine sales.
  • A 2015 law says that retailers in B.C. can sell only Canadian wine in grocery shelves, while imports are relegated to other areas of the grocery stores.
  • The EU and Argentina are large exporters of wine into Canada.

Selected wines from Canada.
Bernard Weil | Toronto Star | Getty Images
Selected wines from Canada.

Add a glass of Malbec and Bordeaux to the table. The EU and Argentina have asked to join the conversation as the U.S. and Canada quibble over wine.

The two wine-producing regions this month filed a request to be party to the negotiations between the U.S. and Canada as the U.S. fights a Canadian law that sidelines the display of imported wine.

According to a 2015 regulation, grocery stores in British Columbia can sell only domestic wine on their grocery shelves. Imported wine must be sold in "store within a store" formats with a separate cash register.

The U.S. filed its first complaint requesting "consultation" under President Barack Obama in January, and President Trump followed up earlier this month in a second complaint.

Consultations are confidential negotiations often held in Geneva to resolve diplomatic disputes. More often than not, consultations are resolved in favor of the country issuing the complaint.

The European Union and Argentina have now asked to take part in the consultation. The two are, according to their filings made public this month, the largest and second-largest exporter of wines into Canada respectively.

"The measures maintained by the Canadian province of British Columbia regarding the sale of wine in grocery stores may have a substantial impact on the sale and consequently on the importation of EU wine into British Columbia," wrote the EU in its statement dated Oct. 12.

According to a study commissioned by several wine trade organizations, Canadian wines represent only about 30 percent of all wine sales across the country. Wine aficionados best know Canadian wine for its dessert vintage "icewine."

The dispute over wine, of course, comes as U.S., Canada and Mexico have struggled to come to terms in revising the North American Free Trade Agreement. The parties have said that because of "significant conceptual gaps" they will delay renegotiating the treaty through the first quarter of 2018.

It also comes amid a dispute between the U.S. and its northern neighbor over Canadian jet maker Bombardier. The U.S. has alleged that Bombardier received unfair state aid and has slapped a 300 percent trade tariff on the delivery of each jet.

Still, WTO sources caution against drawing too strong a link between the wine dispute and NAFTA, noting that such disagreements are relatively common.