Distilled Spirits Council Applauds New USMCA Agreement

The Distilled Spirits Council of the United States today applauded the signing of an agreement to move forward with the U.S.-Mexico-Canada Agreement (USMCA) to replace the North American Free Trade Agreement (NAFTA). The signing follows an agreement reached earlier today between the Trump Administration and Democratic congressional leadership.

“The USMCA reaffirms tariff-free trade with two of our largest and most important export markets,” said Chris Swonger, president and CEO of the Distilled Spirits Council of the United States. “Since tariffs were eliminated under NAFTA in 1995, U.S. spirits exports to Canada grew by nearly 1,700 percent and to Mexico by approximately 1,500 percent. We believe the USMCA can build upon the incredible growth in U.S spirits exports under NAFTA to further increase American spirits exports supporting new, good-paying American manufacturing jobs.”

In addition to preserving duty-free trade in spirits, the USMCA preserves recognition for “Bourbon” and “Tennessee Whiskey”; reaffirms commitments concerning the internal sale and distribution of distilled spirits; and establishes new best practices regarding labeling and certifications for beverage alcohol, which will help to facilitate trade in distilled spirits among the three countries. Additionally, the United States secured Mexico’s agreement to take steps to provide distinctive product recognition for “American Rye Whiskey,” a fast-growing category of American Whiskey.

“The prompt introduction and passage of legislation to implement USMCA will provide certainty to U.S. producers and importers and create new momentum for further discussions with the EU, China and Turkey to secure the swift removal of retaliatory tariffs on American spirits exports and U.S. tariffs on certain EU spirits,” said Swonger.

In 2018, U.S. spirits exports to Canada were valued at more than $234 million; of this, 21 percent is accounted for by American Whiskeys ($49.6 million). Exports to Mexico in 2018 were valued at $61 million; of this, 32 percent is accounted for by American Whiskeys ($19.3 million). In 2018, Canada ranked as the top export destination for U.S. spirits exports and Mexico ranked as the ninth largest.