The Distilled Spirits Council today applauded the newly announced, modernized trade agreement: the United States-Mexico-Canada Agreement (USMCA).
“Trade is a key component to a strong economy, and the U.S. spirits industry and our consumers benefit from free and fair trade agreements,” says DISCUS Interim President and CEO Clarkson Hine. “The USMCA agreement is welcome news for American spirits’ exporters. We hope this creates new momentum for further discussions in North America, the EU and elsewhere that lead to the swift removal of retaliatory tariffs on American spirits exports.”
The agreement helps reaffirm commitments concerning the internal sale and distribution of distilled spirits and tariff-free trade in spirits. It also establishes new best practices regarding labeling and certifications for beverage alcohol, which will help to facilitate trade in spirits among the three countries.
In addition, the U.S. secured Mexico’s agreement to consider granting distinctive product recognition for American Rye Whiskey. The new agreement also preserves distinctive product recognition for Bourbon and Tennessee Whiskey in Canada and Mexico, and for Canadian Whiskey, Tequila and Mescal in the U.S.
The U.S. spirits sector has expanded significantly over the past two decades, and U.S. spirits are now exported from small, medium and large distillers located in 42 states, supporting the direct and indirect employment of an estimated 1.5 million people across America.
While the agreement reached maintains duty-free access for U.S. spirits exports to Canada and Mexico, U.S. whiskeys continue to face retaliatory tariffs to those markets. Currently, Canada is imposing a retaliatory tariff of 10 percent on all U.S. whiskey imports in response to the steel and aluminum tariffs. In 2017, total U.S. whiskey exports to Canada were valued at $48.7 million. In addition, Mexico is imposing a retaliatory tariff of 25 percent on U.S. whiskeys. In 2017, total U.S. whiskey exports to Mexico were valued at $13.4 million.
“Now that this important agreement has been achieved, we hope the three parties can quickly resolve their other trade disputes so that free and fair trade for U.S. whiskey exports is resumed,” Hine adds.