Agreement on trade in wine

This agreement aims to encourage and promote trade in wine produced in South Africa and in the European Community. This agreement supplements the Trade, Development and Cooperation Agreement (TDCA).

ACT

Council Decision 2002/51/EC of 21 January 2002 on the conclusion of an Agreement in the form of an exchange of letters between the European Community and the Republic of South Africa on trade in wine [Official Journal L28 of 30.01.2002].

SUMMARY

Background

In October 1999, the European Community and South Africa concluded a Trade, Development and Cooperation Agreement (TDCA). This agreement governs their bilateral relations and is supplemented by four additional agreements, including an agreement on trade in wine and an agreement on trade in spirits. This agreement replaces the provisional agreement on this subject annexed to the TDCA.

Scope

The agreement applies to wine already mentioned in the 1983 International Convention on the Harmonised Commodity Description and Coding System.

The agreement lays down provisions on the marketing of existing stocks which do not conform to the conditions of the present agreement. Wine which has been produced using oenological practices or processes not envisaged by the agreement may be marketed until stocks are exhausted. Products which are described and labelled in a manner that does not conform to the agreement may be marketed by wholesalers or producers for a period of three years and by retailers until stocks are exhausted.

However, the agreement does not apply to wine which is in transit through the territory of one of the parties, or which originates in the territory of one of the parties and which is consigned in small quantities between those parties.

Wine production

The agreement highlights the authorised oenological practices and processes, which are listed in an annex. These include inter alia, specifications concerning the addition of certain substances such as tannin. The agreement establishes mutual recognition of wine practices and processes, which is essential in ensuring trade in wine between the parties.

Nevertheless, the agreement includes a safeguard clause which permits one of the parties to suspend provisionally the authorisation for processes or to restrict the prescriptions for practices. This clause may be invoked if, for example, it is considered that the process presents risks for public health. A decision is then taken on the appropriate process or practice.

Description and presentation of wine

The agreement provides for the reciprocal protection of names and other provisions linked to the description and presentation of wine. This involves the protection of names that refer to the Member State of the Community or to South Africa as well as geographical indications within countries (the name 'Champagne' for example). The indications protected for each Member State of the EC and for South Africa are listed in an annex to the agreement.

It is possible for the same geographical indications or very similar indications to be used by both parties. In this cases, both indications may be protected provided the name is traditionally and consistently used and the true origin of the wine is clear. With regard to indications of a place situated outside the territories of the parties, the provisions are the same, use of the indication being regulated by the country of origin. A joint committee is set up to give an opinion in such cases. However, specific provisions are laid down in relation to the ban on using the names 'port' and 'sherry'.

The denomination 'Retsina' is a specific case. With a view to protecting the South African market, importers of Community 'Retsina' in South Africa must register the name as a trademark for certification in accordance with South African law.

Specific provisions relating to the names 'port' and 'sherry'

South African and EC producers both use the names 'port' and 'sherry', which posed a problem in the negotiations on the agreement. Provisions aimed at resolving this problem were adopted in the annex to the TDCA and these provisions remain in force. They entered into force in January 2000, at the same time as the TDCA.

Following a transitional period, South Africa will phase out the use of the names 'port' and 'sherry'. Initially, the names will no longer be used for its exports to the European Community. Within five years, the names will no longer be used for any export market, with the exception of the member countries of the SADC (South African Development Community), apart from the SACU (South African Customs Union), for which the deadline is eight years. Within South Africa, the names may be used for a transitional period of 12 years. For the purposes of the agreement, the South African internal market is defined as covering the SACU (South Africa, Botswana, Lesotho, Namibia and Swaziland).

Implementation

The correct application of the agreement is the responsibility of the authorities appointed by each party and a joint committee of representatives of both parties. The joint committee ensures that the agreement is applied, examines the questions raised, ensures coordination and may make recommendations on its implementation.

Infringements

The agreement provides for a consultation procedure in cases where one of the parties considers that the other has not complied with the agreement. If they do not reach agreement, they may invoke the dispute settlement procedure. In the absence of an agreement before the settlement body, the party may refer the matter to arbitrators.

Tariff quota for imports into the European Community

The European Community has also laid down other measures to facilitate the access of South African wine to the Community market. These measures amend the agreement on trade, development and cooperation. European Community establishes an annual duty-free tariff quota of 35.3 million litres of wine imported from South Africa. In addition, each year from 2002 to 2011 a fixed volume of 6.72 million litres will be added to the basic volume of the annual quota (these provisions are laid down in Council Regulation (EC) No 120/2002 amending Regulation (EC) No 2793/1999 as regards the adjustment of the tariff quota for wine). This volume represents an increase in relation to the annual quota set out in the provisional agreement annexed to the TDCA.

According to the agreement, imports from both territories must be accompanied by certificates conforming to particular specifications.

Community assistance for the restructuring of the South African wine and spirits sector

The European Community has undertaken, within the framework of the TDCA, to provide EUR 15 million to establish a programme on the restructuring of the wine and spirits sector and to ensure the marketing and distribution of South African wines and spirits.

Entry into force

The agreement enters into force on the first day of the month following that during which the parties have notified each other of the completion of the necessary procedures. In the meantime, the agreement entered into force provisionally on 28 January. However, the tariff quota for imports of South African wine into Europe was opened retroactively on 1 January 2002 and the period for the phasing-out of the names 'port' and 'sherry' began on the same date (Council Decision 2002/54/EC).

Last updated: 01.08.2007