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US signs free trade deal with Mexico and Canada

A trade deal has been agreed between Mexico, Canada and the US, which will preserve the status of Bourbon and develop “product-specific rules of origin” for American rye whiskey.

The US-Mexico-Canada Agreement is said to be “mutually beneficial” for the three nations

The US-Mexico-Canada Agreement (USMCA) replaces the North American Free Trade Agreement (Nafta) and is said to be “mutually beneficial” for workers, farmers, ranchers, and businesses.

The deal aims to “create a more level playing field” and includes “a number of important provisions for the spirits industry”.

As a result of the USMCA, duty-free trade in spirits will be maintained between the three nations, recognition for Bourbon and Tennessee whiskey will be preserved and commitments for the international sale and distribution of spirits will be reaffirmed.

The deal also secures Mexico’s agreement to take steps to provide distinctive product recognition for American rye whiskey and establishes best practices regarding labelling and certifications for alcoholic beverages.

Christine LoCascio, chief of public policy for the Distilled Spirits Council of the US (Discus), said: “The US spirits industry and its consumers benefit from free and fair trade agreements. We strongly support USMCA and look forward to working with the administration and congress to secure the prompt approval of the agreement.”

The USMCA was signed by the governments of Mexico, Canada and the US on 30 November 2018. The introduction of legislation HR 5430 in the US means the trade agreement has now been formally implemented.

According to Discus, the elimination of tariffs under NAFTA in 1995 boosted US spirits exports to Canada by nearly 1,700% and to Mexico by approximately 1,500%.

In 2018, US spirits exports to Canada were valued at more than US$234 million. Exports to Mexico in 2018 were valued at US$61m.

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