MEPs to extend support to wine sector amid COVID, US tariffs uncertainty

According to the European Commission, the demand in the wine market was particularly hit by restrictions and cancellations of celebrations, as well as by the US punitive tariffs. [SHUTTERSTOCK/FILIMINOV]

European lawmakers have backed the European Commission’s proposal to extend the length of an aid package for winegrowers by a year.

A first set of extraordinary measures was originally adopted by the Commission in May 2020 and then reinforced last July, after the call for a more ambitious aid package come from MEPs.

The support is intended to help winegrowers coping with the disruption caused by the pandemic and in particular by the closure of restaurants and bars across the EU.

According to the Commission, the demand in the wine market was particularly hit by restrictions and cancellations of celebrations.

For farmers’ association COPA-COGECA, wine demand has not fully recovered from the first wave of the pandemic, during which more than 30% of the market outlets were lost.

But the sector has also been hit by the trade tariff spat with the United States. In October 2019, the US announced punitive tariffs on EU agri-food products after the World Trade Organisation (WTO) ruled in their favour over EU subsidies for the European aircraft manufacturer Airbus.

New US duties became effective at the beginning of 2021, including tariffs on new types of alcoholic drinks from the Airbus-producing nations – France, Germany, Spain, and the United Kingdom.

On Tuesday (2 February), MEPs in the European Parliament’s agriculture committee gave the go-ahead to the proposal of prolonging those measures until 15 October 2021, also making them retroactively applicable from 16 October 2020.

The advice from the relevant committee on the matter needs formal approval by the Parliament’s plenary next week.

The package relies on the EU co-funded budget for wine national support programme, making it more flexible by providing some exemptions from the Common Agricultural Policy (CAP)’s obligations.

The EU’s contribution to all the measures listed in the package is increased to 70%, while it is normally set at 50%.

The main component of the support measures is the crisis distillation private storage, which allows wine to be removed from the market, limiting the negative impact on prices and also improving operators’ cash flow.

The package also includes the funding of the so-called “green harvesting” tool, which implies the total destruction or removal of grape bunches while still in their immature stage.

“Our farmers need legal certainty and flexibility to cope over this prolonged period of huge uncertainty,” the French centre-right MEP Anne Sander commented, adding that even the present policy measures could turn out to be insufficient.

She also called on the Commission to come up with a diplomatic solution to the current trade war with the US and with stronger and well-targeted support measures to compensate the worst-hit wine operators, in order to protect millions of jobs in the European agri-food sector.

Joe Biden’s election as US President has been hailed as offering new hope for struggling transatlantic relations and Brussels is understood to be ready to suspend tariffs if the US were willing to do the same, and if the Biden administration steps back from Trump’s hardline trade stance.

On the day of Biden’s inauguration in Washington, MEPs asked trade Commissioner Valdis Dombrovskis “to intervene directly” in the Airbus/Boeing dispute and settle for good the trade dispute with the US that has soured transatlantic relations in recent years.

MEPs wink at Biden, call for ending US tariff spat

On the very day of Joe Biden’s inauguration in Washington on 20 January, European lawmakers urged the European Commission to settle for good the trade dispute with the US that has soured transatlantic relations in recent years.

[Edited by Benjamin Fox]

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