'Insurance policy' for wine exporters

By DITA DE BONI

A new trade agreement on wine is the first of its type and is an "insurance policy" for future wine exports, says the New Zealand Wine Institute.

But the bigger nut, the European Union, is still proving hard to crack, with trade barriers there showing no signs of weakening.

Last week in Adelaide, New Zealand signed an agreement called the "Mutual Acceptance Agreement on Oenological [winemaking] Practices" along with the United States, Canada and Australia.

The treaty essentially removes barriers to trade growth between the "new world" wine countries based on differences in winemaking practices, says the Wine Institute's Philip Gregan.

"For example, in NZ you can add sugar to wine, whereas in Australia you cannot add sugar but you can add grape juice," says Mr Gregan.

"What this treaty does is say [that] despite the fact differences in winemaking exist, it will be legal to produce and sell the wine in the [signatory] countries because the wine does not contravene health and safety regulations in each country."

While North America is a growing market, Mr Gregan admits that a similar trade agreement with New Zealand's largest export market, the United Kingdom, is more coveted.

Currently NZ has stopped talking about lowering trade barriers with the UK, although it is understood countries such as Australia, with still more at stake, continue to lobby the EU for better access to those markets.