Delegated regulation 2020/419 - Commission Delegated Regulation 2020/419 derogating from Delegated Regulation (EU) 2016/1149 supplementing Regulation 1308/2013 as regards the national support programmes in the wine sector - Main contents

EN

Official Journal of the European Union

L 84/1

On 2 October 2019, the World Trade Organization (WTO) issued the arbitration decision in European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft, WT/DS316/ARB. The arbitration decision entitled the United States of America (USA) to request an authorisation to impose countermeasures at a level not exceeding USD 7,5 billion annually in response to Union subsidies to Airbus. On 18 October 2019, the USA imposed a 25 % ad valorem import duty on, among others, still wines exported to the USA by Germany, Spain, France and the United Kingdom. This exceptional, inequitable and unpredictable situation is having a severe and detrimental impact on the global trade of all Union wines. The USA have further threatened to apply 100 % ad valorem import duties on French sparkling wines in response to the French Digital Services Tax (GAFA tax).

The import duties imposed by the USA are having a direct and severe impact on the Union wine trade on the USA market, which is the Union’s largest export market for agricultural products, and for wine in particular, both in terms of value and volume of exports. In 2018, Union wine exports to the USA totalled 6,5 million hectolitres, accounting for EUR 4 billion. Union wine exports to the USA typically represent between 30 % and 40 % of the global Union wine export value.

The increased import duties imposed by the USA are having a damaging effect on all Union wine, not only on still wines originating from the four Member States that are subject to the increased import duties. The reputation and trade of all Union wine present in the USA market is adversely impacted as a result. The reputation of a wine is determined not only by its quality but also by its price and the perceived price-quality ratio. This is particularly the case for the lower to middle range priced wines, which, in absolute terms, are more impacted by a 25 % import duty than more expensive wines that are purchased by connoisseurs for whom a price increase does not operate as a deterrent. Union wines compete in the USA market with wines from other origins such as South America, Australia or South Africa. In the light of such fierce and intense competition, perception of overall price levels plays a significant role. Where the consumer is aware that the price of wine from certain origins within the Union is subject to an increased import duty, this will have a negative impact on the overall perception of the price level of Union wines as such and thus divert consumer demand to products of other origins. In the light of the identified resulting market conditions and decrease in overall returns to producers, immediate measures to address the effects of the import duties are warranted covering all wines originating in all Member States and not only in those directly targeted by the import duties.

From a market stability perspective, the import duty regime imposed by the USA does not represent an isolated national measure with effects limited to the trade with the USA. The world wine...