Wine Industry Cool to Tariff Concession

WASHINGTON —  The wine industry Thursday reacted coolly to the Clinton Administration’s announcement that Mexico, in a last-minute concession, is willing to negotiate lower tariffs for U.S. exports. “All we have sought is a level playing field,” said a Wine Institute spokesman in Washington, “and up to this time NAFTA has not achieved this.”

The side agreement calls for three months of negotiations with Mexico on the wine tariff issue after NAFTA is ratified. But Wine Institute spokesman Robert P. Koch said the industry is concerned that the talks may not lead to lower trade barriers to U.S. wine and brandy.

Rep. Richard H. Lehman (D-North Fork), whose district is heavily dependent on wine production, said, “This is not something I could tell people we can go out and sell.” Lehman is leaning toward opposing the treaty.

The Administration, seeking to make the treaty more palatable for the congressional vote Nov. 17, Wednesday announced six side agreements to NAFTA.

The tariff issue bears heavily on California, which produces 90% of U.S. wine and supports 110,000 full-time wine industry jobs.

As industry officials awaited more details on the side deal with Mexico, Rep. Robert Matsui (D-Sacramento), a key treaty backer who helped win the concession, vowed to “tear up the letter (of agreement) if the industry doesn’t come on board in 48 hours.”

Matsui criticized the industry as ungrateful.

The wine industry has never been happy with the proposals spelled out in NAFTA, which would eventually eliminate trade barriers between the United States, Canada and Mexico.

Mexico now imposes a 20% tariff on U.S. table wine, which would be phased out over a decade. But Chile, in its 1991 free-trade agreement with Mexico, negotiated having its wine duty dropped to 10% immediately and eliminated by 1996.

Times staff writer Juanita Darling in Mexico City contributed to this report.