Negotiating EU-Australian
Engagement: the 1994 and 2008
Wine Trade Agreements
Lachlan McKenzie
PhD Candidate
School of Social and Political Sciences
The University of Melbourne
The 1994 and 2008 Wine Trade
Agreements
• 1994 and 2008, two
agreements, one process.
• Concerning geographical
indicators (GIs), traditional
expressions (TEs) and
winemaking practices and
labelling.
• Driven by bargaining leverage
and respective relationship to
industry.
Getting to the negotiation table
• EU share of global wine
exports was 58% in the
early 1990s
• An industry of significant
cultural and economic
importance to many
member states.
• Europe's strong and
coordinated wine lobbies
perceived protection of
their GIs and TEs as
essential to their
success.
• No domestic (Australian)
legal recourse for the
French industry.
• The EU was compelled
to negotiate an
agreement to protect
wine GIs and set a
precedent.
Objectives and concessions
“The French were so offended with us using Champagne, and the denigration of their
brand, that it would have overcome any reservations they would have had.” – Australian
negotiator
Pre-negotiation objectives
Pre-negotiation point willing
concession to concede
EU
• Gain protection of important
GIs and TEs.
• Establish a precedent for future
negotiations with New World
• Recognition of Australian wine-
labelling and winemaking
practices (and therein
unrestricted market access).
wine producers.
Australia
• Stop EU restriction on
• Recognition of some European
Australian wine exports to
wine GIs and TEs, but faced
Europe.
opposition from industry.
1. Constraints on bargaining:
the EU, a hard bargainer
• “the Europeans were the slow ones to come
to the table, because they had sixteen people
(member states) they had to get to the table”.
– Australian negotiator
• Another Australian negotiator described the
negotiations as “pedantic, we couldn’t get
anything through, the negotiations were very
difficult”.
2. Constraints on bargaining:
explaining the EU’s diminished inflexibility
• “their (the EU’s) links back to industry were
different to Australia’s … the wine industry is
controlled much more than in Australia so it
was more the case for the industry to accept
the laws of the EU” – Australian negotiator
• Conversely Australians had to sell agreements
to industry, which “was a real constraint for
negotiators” – Australian negotiator
Number of Australian uses of the GI
Champagne
87
90
93
94
96
Source: Steven Stern, Corrs Chambers
Westgarth.
98
99
03
Figure 2: Number of Australian uses of
the GI Red-Burgundy
87
90
93
94
95
Source: Steven Stern, Corrs Chambers
Westgarth.
96
98
99
Figure 3: Number of Australian uses of
the GI Chablis
87
90
93
94
95
Source: Steven Stern, Corrs Chambers
Westgarth.
96
98
99
Concessions
• The EU conceded access for Australian wine to its
market.
• This included access to the UK market, one of the
largest wine importers globally.
• Australian conceded use of European GIs and TEs,
with the ‘best endeavours clause’.
• EU negotiators “would have played a bit harder
had they known how well Australian wine would
penetrate the UK market” – Australian negotiator
The outcome
Gains and Concessions
EU
Objectives achieved/ Gains
Concessions
• Guarantee of eventual
• Recognition of Australian
phase out of its wine GIs
winemaking techniques,
(final phase out GIs 1
ontological practices an
September 2011)
wine labelling (effective free
• Over 2,500 GIs recognised
market access)
by Australia
Australia
• EU recognition of Australian
• Protection of European GIs
winemaking techniques,
with a phase out period
ontological practices and
wine labelling (effective free
market access)
• EU recognition of Australian
wine GIs
Australian Wine Exports to Europe
In 2009-10, Australia exported 382 million litres
of wine to the EU worth $863 million. (DAFF)
Australian Wine Exports to the UK
Source: Stephen Stern, Coors Chambers Westgarth.
Conclusion
• The negotiations demonstrate
– The potential benefit of negotiating
with the EU in areas of common
interests, as opposed to issues like
agricultural protectionism.
– The importance of understanding
EU policy processes.
– The impact that domestic
institutions and structures can have
on bargaining behaviour.
Thank you