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Argentine wine makers nervous about EU trade deal

Video Credit: Reuters Studio - Duration: 02:08s - Published < > Embed
Argentine wine makers nervous about EU trade deal

Argentine wine makers nervous about EU trade deal

The Mercosur-EU deal - twenty years in the making - a trade agreement between the South American bloc, which includes Argentina, Brazil, Paraguay and Uruguay, and the European Union is not as clear-cut a win for business as political leaders have touted.

Havovi Cooper reports.

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Argentine wine makers nervous about EU trade deal

This is Mendoza province- the heart of Argentina's wine country and home to the famed Malbec... For these wine makers - it should be a time of celebration.

After 20 years of negotiations- a group of South American countries -together known as Mercosur - finally reached a new free trade agreement with the EU this past June.

But some here are afraid the deal is not a clear cut win.

Reuters Correspondent Cassandra Garrison is in Mendoza province.

(SOUNDBITE) CASSANDRA GARRISON, REUTERS CORRESPONDENT SAYING: "Under the Mercosur/EU trade deal tariffs will be reduced to 0% for the majority of products including wine.

Previously EU countries paid as much as 27% to export their wine to the Mercosur and Mercosur countries paid about 4% in tariffs to send their wine to the EU.

Now with the new 0% tariffs some Argentine winemakers are arguing the deal is asymmetrical because it represents a much greater tariff reduction for EU countries." That means European wines will soon be available in Argentina for cheaper prices... a concern for local producers who command the domestic market--75% of the wine made in Argentina is consumed in the country.

And another reason to fret- there's Brexit.

(SOUNDBITE) CASSANDRA GARRISON, REUTERS CORRESPONDENT SAYING:"Britain leaving the EU would change the equation of the deal because the UK is currently the largest importer of Argentine wine in the EU.

If Brexit happens, the Mercosur wine going into the UK would no longer benefit from the zero pct tariff that's currently part of the EU trade deal." While some individual wine makers have voiced their concerns to Reuters, industry groups are optimistic - they expect the deal to bring double-digit sales growth for Argentine wine within a few years.

And even if it doesn't -wine makers are confident malbec will still be number 1 in argentina..

(SOUNDBITE) CASSANDRA GARRISON, REUTERS CORRESPONDENT SAYING: "One producer told me Spaniards will always love rioja, the French will always love champagne and Argentine's will always love Malbec."




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