01989A0315(01) — EN — 01.06.2004 — 001.001

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Amended by:









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AGREEMENT

between the European Economic Community and Canada concerning trade and commerce in alcoholic beverages







THE EUROPEAN ECONOMIC COMMUNITY AND THE GOVERNMENT OF CANADA (hereinafter referred to as ‘the parties’), TAKING INTO ACCOUNT their respective rights and obligations under the General Agreement on Tariffs and Trade with respect to the treatment of goods, and particularly alcoholic beverages, originating in the territory of the other party; RECALLING the findings and conclusions of the GATT Panel on Import, Distribution and Sale of Alcoholic Drinks by Canadian Provincial Marketing Agencies; DESIRING to resolve their differences over trade in the alcoholic beverage sector and to ensure respect for international legal obligations while acknowledging the temporary need for structural adjustment; ENDEAVOURING to ensure that measures that are currently benefiting the sale of alcoholic beverages originating in the European Economic Community are not made more restrictive, HAVE AGREED AS FOLLOWS:







Article 1

Definitions

In this Agreement:

‘ ►M1 base price ◄ ’ means the landed cost of alcoholic beverages, which may include the cost of service, incurred by Canadian competent authorities;

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‘Canadian competent authority’ means any government or commission, board or other governmental agency that is authorized by law to control the sale of distilled spirits, wine and beer;

‘cost of service’ means the audited expenses incident to the purchase, storage, delivery to sales points, handling and sale of alcoholic beverages;

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‘cost of service differential’ means the amount by which the cost of service attributable to an imported product differs from the cost of service attributable to the like domestic product;

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‘the Community’ means ‘the European Economic Community’;

‘delisting’ means a revocation of a listing;

‘distilled spirits’ means spirits, liqueurs and other spirituous beverages;

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‘listing’ means a decision by a Canadian competent authority whether brands or varieties of distilled spirits, wines and beer may be sold in its outlets;

‘mark-up’ means the amount added to a base price and to applicable duties and taxes which results in the establishment of a retail price;

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‘measure’ includes any law, regulation, procedure, requirement or practice;

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‘product of Canada’ means distilled spirits, wine or beer respectively that is produced, bottled or packaged in Canada;

‘product of the Community’ means distilled spirits, wine or beer respectively that is produced in the customs territory of the Community;

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‘retail sale’ means the supply of alcoholic beverages to the final consumer or sale to a restaurant, bar, club or other licensed establishment.

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Article 2

National treatment and most-favoured-nation treatment

1. Canadian competent authorities shall accord national treatment and most-favoured-nation treatment to alcoholic beverages that are the product of the Community in accordance with the WTO Agreement. With respect to a province, national treatment and most-favoured-nation treatment shall mean treatment no less favourable than the most favourable treatment accorded by such province to any like goods that are the product of Canada or of any other third country.

2. By way of derogation from paragraph 1, Canadian competent authorities may maintain a measure within their respective jurisdictions provided it is implemented in a manner compatible with Canadian law:

(a) limiting sales by a distillery or a winery on its premises to distilled spirits or wines produced there at prices no lower than those of the same distilled spirits or wines sold through outlets available for product of the Community;

(b) requiring private wine store outlets in Ontario and British Columbia to sell only wines produced by Canadian wineries;

(c) requiring that, with the existing exception of eight brand-sizes of wines bearing an appellation of origin, wine without appellation of origin and without indication of varietal names sold in grocery stores in Québec under applicable regulations, be bottled in Québec, provided that alternative outlets are provided in Québec for the sale of wine that is the product of the Community, whether or not such wine is bottled in Québec.

Article 3

Geographical indications

1. Canadian competent authorities shall not list or sell wines or spirit drinks that incorrectly bear a geographical indication protected under Canadian law.

2. Canadian competent authorities, in the exercise of any functions relating to the purchase and sale of wines, shall maintain their purchasing rules or policy in respect of geographical names of the Community so as to not market wines not originating in the place indicated by the name in question, where they did not do so on 1 November 2002.

Article 4

Commercial treatment

Canadian competent authorities shall, in exercising their responsibilities for the purchase, distribution and retail sale of product of the Community, adhere to the provisions of GATT Article XVII concerning State trading enterprises, in particular to make any such decisions solely in accordance with commercial considerations and shall afford the enterprises of the Community adequate opportunity, in accordance with customary business practice, to compete for participation in such purchases.

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Article 4a

Pricing

1. Canadian competent authorities shall ensure that any mark-up, cost of service, or other pricing measure is non-discriminatory, applies to all retail sales, and is in conformity with Article 2.

2. A cost-of-service differential may be applied to products of the Community only in so far as it is no greater than the additional costs necessarily associated with the marketing of Community products, taking into account additional costs resulting from, inter alia, delivery methods and frequency.

3. The cost-of-service differential shall be justified in line with standard accounting procedures by independent auditors on the basis of an audit completed on request within one year of the entry into force of the Agreement between the European Community and Canada on trade in wines and spirit drinks and thereafter on request at intervals of not less than four years. The audits shall be made available to the Community within one year of a request being made.

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Article 5

Listing and delisting measures

1. Any measure of Canadian competent authorities relating to the listing or delisting of products of the Community shall be:

(a) non-discriminatory;

(b) based on normal commercial considerations;

(c) transparent; and not create disguised barriers to trade; and be

(d) published and made available to persons with an interest in the trade and listing or decisions to delist such products.

2. Canadian competent authorities shall, in respect of applications for listing of or decisions to delist products of the Community, provide:

(a) prompt, written notification of decisions to applicants;

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(b) in the case of a refusal to list or decision to delist, written reasons for those decisions;

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(c) administrative appeal procedures to ensure prompt, objective reviews of a decision to refuse to list or a decision to delist.

Article 6

Consultations

The parties shall monitor the implementation of the Agreement and shall consult, promptly at either's request, concerning any matter relating to its interpretation and implementation. This will include consultations on measures that are currently benefiting the sale of the product of the Community.

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Article 7

Final provisions

1. The Parties retain their rights and obligations under the WTO Agreement.

2. Nothing in this Agreement shall prejudice the rights of a supplier, his agent or other interested party under Canadian law.

3. In so far as any Canadian provincial authority does not exercise its authority to direct product selection and retail sales, it will not be covered by the provisions of this Agreement.

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Article 8

Duration

This Agreement shall enter into force on signature.

This Agreement shall be of indefinite duration. ►M1 It may be terminated by either party on one year’s notice. ◄

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Should either Party terminate the Agreement between the European Community and Canada on trade in wines and spirit drinks, such termination shall also effect a simultaneous termination of the present Agreement.

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Hecho en doble ejemplar en Bruselas, el veintiocho de febrero de mil novecientos ochenta y nueve.

Udfærdiget i to eksemplarer i Bruxelles den otteogtyvende februar nitten hundrede og niofirs.

Geschehen zu Brüssel am achtundzwanzigsten Februar neunzehnhundertneunundachtzig in zwei Urschriften.

Έγινε σε δύο αντίτυπα στις Βρυξέλλες, την εικοστή ογδόη Φεβρουαρίου χίλια εννιακόσια ογδόντα εννέα.

Done in duplicate at Brussels this twenty-eighth day of February in the year one thousand nine hundred and eighty-nine.

Fait en double exemplaire à Bruxelles, le vingt-huit février mille neuf cent quatre-vingt neuf.

Fatto in duplice esemplare a Bruxelles, il ventotto febbraio millenovecentottantanove.

Gedaan in tweevoud, te Brussel, op achtentwintig februari negentienhonderd negenenachtig.

Feito em duplo exemplar em Bruxelas, aos vinte e oito de Fevereiro de mil novecentos e oitenta e nove.

Por el Consejo de las Comunidades Europeas

For Rådet for De Europæiske Fællesskaber

Für den Rat der Europäischen Gemeinschaften

Για το Συμβούλιο των Ευρωπαϊκών Κοινοτήτων

For the Council of the European Communities

Pour le Conseil des Communautés européennes

Per il Consiglio delle Comunità europee

Pelo Conselho das Comunidades Europeias

Por el Gobierno de Canadá

For Canadas regering

Für die Regierung Canadas

Για την κυβέρνηση του Καναδά

For the Government of Canada

Pour le gouvernement du Canada

Per il governo del Canada

Voor de Regering van Canada

Pelo Governo do Canadá

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EXCHANGES OF LETTERS

Letter No 1

Brussels, 28 February 1989

Sir,

I refer to the Agreement between Canada and the European Economic Community concerning Trade and Commerce in Alcoholic Beverages that was signed today.

I wish to confirm that the Prime Minister of Canada and the Premiers of the Provinces of Canada have agreed to initiate negotiations, involving the federal and provincial governments, concerning the reduction or elimination of interprovincial barriers to trade in alcoholic beverages, including beer.

Canada will bring measures on pricing of beer into conformity with its GATT obligations following a successful conclusion of this process.

Please accept, Sir, the assurance of my highest consideration.

For the Government of Canada

Letter No 2

Brussels, 28 February 1989

Sir,

I acknowledge receipt of your letter of today's date with regard to mark-up differentials on beer.

I note it is the intention of the Government of Canada to bring measures on pricing of beer into confirmity with its GATT obligations.

Please accept, Sir, the assurance of my highest consideration.

On behalf of the Council of the European Communities

Letter No 1

Brussels, 28 February 1989

Sir,

In the context of the bilateral settlement of the disputes between Canada and the Community regarding the practices of provincial liquor boards in Canada which we have signed today, I hereby confirm the Community's willingness to enter into negotiations with Canada on the reciprocal supervision and protection of spirituous beverages appellations. I note that the Government of Canada is also willing to enter into parallel negotiations on reciprocal recognition of origin appelations for wine and that we agree to start those negotiations in the first quarter of 1989.

I would appreciate your confirmation of the Government of Canada's agreement with the terms of this letter.

Please accept, Sir, the assurance of my highest consideration.

On behalf of the Council of the European Communities

Letter No 2

Brussels, 28 February 1989

Sir,

Thank you for your letter of today's date concerning the Community's willingness to enter into negotiations on the reciprocal supervision and protection of spirituous beverages appellations and on reciprocal recognition of original appellations for wine. I hereby confirm the Government of Canada's willingness to enter into the proposed negotiations.

Please accept, Sir, the assurance of my highest consideration.

For the Government of Canada