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Trade row over labelling

The deadlock between South Africa and the European Union (EU) over the use of labelling on the wines and spirits emanating from South Africa has been referred to the chief negotiators of the two trading partners, an official of South Africa’s trade and industry department told IRIN on Wednesday.

“The issue behind the dispute relates to the protection of intellectual property rights over the names that some EU countries want protected,” the official said, adding that these include terms like “port”, “sherry”, “grappa”, and “ouzo” that South Africa uses on some wines and spirits.

The official added, however, that this dispute will not affect the main trade, cooperation and development agreement (TCDA) that the two parties signed a month ago. “The EU should decide how we should proceed with the wines and spirits agreement,” said the official, who hinted that South Africa is unlikely to agree to phase out the usage of the terms.

However, a representative of Stellenbosch Farmers Winery (SFW), which exports nearly 40 million litres of wine per annum to the EU market, told IRIN that this labelling dispute appears to be the EU’s attempt at regaining the ground it lost in the World Trade Organisation (WTO) negotiations in Uruguay.

“The EU lost out on the use of trademarks and “traditional” expressions, which are used woldwide by other countries other than South Africa,” Andre Steyn told IRIN. “The EU seems to want to set the stage on these trademark issues for the next round of WTO negotiations that start in Seattle, Washington, at the end of this month.”

Steyn added that the EU has been shifting the goalposts in its dealings with South Africa on the trademarks issue. “The EU initially wanted South Africa to phase out the use of terms “port” and “sherry”, but they now have included what are called “traditional” expressions like “grappa” and “ouzo”.

Steyn said if South Africa were to agree to phase out the usage of these terms on its wines and spirits over 12 years, this would harm the country’s exports, because re-labelling the products would drive the consumers to switch to other brands. “This would have a negative impact on the wine and spirits industry, which could lead to massive job losses on the wine farms and distilleries in South Africa,” Steyn said, adding that as a principle, South Africa’s trade negotiators should resist the EU’s moves.

In terms of the TCDA, South Africa and the EU will establish a free trade area under which trade between the union and South Africa will be liberalised over the next 12 years. The EU will grant duty-free status to 95 percent of its imports from South Africa, while South Africa will cut its tariffs on 86 percent of its European imports.


This article was produced by IRIN News while it was part of the United Nations Office for the Coordination of Humanitarian Affairs. Please send queries on copyright or liability to the UN. For more information: https://shop.un.org/rights-permissions

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