As Wines of Chile prepares for the upcoming Grand Tasting to be held in Sao Paolo, Brazil on August 8, Brazilian wine lovers and Chilean wine exporters still await resolution of a proposed safeguard that aims to restrict import of Chilean wine to Brazil.
Intended to boost Brazil’s wine industry, the safeguard would limit wine imports to Brazil from any country (with the exception of Israel) that is not a member of the Mercosur trade consortium. Mercosur represents an agreement between Brazil, Argentina, Uruguay and Paraguay facilitating trade between member countries.
In the 4 months since the safeguard was proposed by Brazil’s government, Wines of Chile has been implementing media campaigns and lobbying relevant political and industry officials in opposition of this measure, which – if successful – would be detrimental to Chilean wineries and would deprive Brazilian consumers of Chile’s amazing terroirs.
During a hearing held several weeks ago at Chile’s Department of Trade (Decom), Wines of Chile presented a strong argument against the safeguard, for consideration by the Brazilian ambassador and other international trade officials and politicians.
Wines of Chile urged Brazil to abandon the safeguard, arguing that it is supported by a small portion – only 5% – of Brazil’s wine industry. Furthermore, the precise nature and viticultural implications of the safeguard are still unclear.
Said Wines of Chile legal representative Federico Mekis, “Failing to define this fairly can produce a result that looks biased, and we would continue to discuss it until the World Trade Organization is receptive to us.”
Responding to Brazil’s allegation that the safeguard is necessary because of a sudden, unforeseen growth in Chile’s Brazilian market, Director General of International Economic Relations Álvaro Jana noted that this new opposition to the gradual increase in Chilean wine imports is not logical, since the particular commercial circumstances being targeted were previously accepted and facilitated by Brazil, indicating that the situation was not unexpected.
Brazil is Chile’s fourth largest wine market, having received 5.5% of Chilean wine exports last year, with a total profit of USD $4.481 million. Considering this potential economic impact, Chilean wineries eagerly anticipate a final verdict on the safeguard, which is expected to be delivered in September.