Dark clouds over global trade – but not without a silver lining…

It is difficult not to comment after the US decision on 31 May to impose tariffs on EU steel and aluminium, which led to an immediate response by the EU and a new phase of trade confrontation impacting global trade.  The coming months will tell – today, I would like to limit myself to some initial reflections on the current situation.

First and foremost, the spirits industry worldwide remains one of the true champions of open and fair trade.  Why?  Because we are firmly convinced of – and can clearly demonstrate – the tremendous benefits that our collective export successes mean for consumers, businesses and agricultural communities alike.  Sometimes, we might disagree on certain issues, and, yes, competition in the marketplace is fierce, but no one in the spirits sector doubts or contests the shared goals of improving market access by eliminating trade barriers.  Time and again, we have called upon our respective governments to stand firm behind the fundamental principles of a rules-based trading system.  We are, and will remain, reliable and committed partners in bilateral agreements and multilateral fora.

In particular, the U.S. and EU spirits sectors are closely intertwined.  We appreciate the Commission’s efforts to normalise EU-US relations and to secure a positive outcome and regret that this has not materialised for now.  Today, the Commission published the list of US products which will be subject to +25% on import duties.  The Commission believes this is a “measured and proportionate decision”.  Today, we can only take note of that decision (which is likely to come into effect early July) and hope there will be no further escalation of tensions.

Beyond this, are there still reasons for hope in the global trade arena?  Surprisingly, but most certainly, yes!  The EU clearly has an ambitious trade agenda to deliver!  This very week, negotiating teams are over in Montevideo for what could be a decisive round for the EU-MERCOSUR negotiations.  This deal is about real improvements for European spirits to be able to compete on an equal footing in the markets.  The agreement must deliver a significant level of market access by removing the tariffs applied to spirits.  The EU market is very much open to imported spirits, so obtaining reciprocity is a sine qua non condition for a deal.

Finally, successful trade policy is also underpinned by dedicated and continued efforts to promote the great variety and outstanding quality of European products.  On this, we would like to express our thanks and appreciation to Commissioner Hogan and his team.  Earlier in May, spiritsEUROPE was proud to travel to China with the Commissioner and a group of European business representatives – so if you’re in the mood for some good news, please continue reading below about our key takeaways from that successful visit.  

Ulrich Adam*
Director General

*In his capacity as permanent representative of SPRL ADLOR Consulting