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French winemakers 'stand to lose nearly €1 billion to US tariffs'

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Red wine bottles of the region of Medoc, western France, are displayed at the wine fair in Paris in February 2020.
Red wine bottles of the region of Medoc, western France, are displayed at the wine fair in Paris in February 2020.   -   Copyright  AP Photo/Michel Euler
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French wine producers are calling on the government to take "tough decisions" as they say new US tariffs could see them losing nearly a billion euros in exports this year.

The US and the European Union have been locked in a dispute over aircraft subsidies for years which escalated in October 2019 when Washington slapped 25% tariffs on a number of European products. Brussels swiftly announced retaliatory tariffs.

French still — non-sparkling — wine with an alcohol level of up to 14 degrees and in bottles of under two litres were included in the US list.

According to the French Federation of Wine and Spirit Exporters (FEVS), the tariffs cost French producers more than €600 million in 2020, with exports to the US falling by 50% compared to the previous year.

France's share of the still wine market in the US fell by 22%, they said, adding that US imports of similar wines from countries not affected by the tariffs "remained level, showing that the drop in French imports is exclusively linked to the impact of the 'Airbus sanctions'".

Washington announced on December 30 that it is extending the sanctions to include still wine of more than 14 degrees and wine-based spirits including Cognac and Armagnac. These will kick in on January 12.

César Giron, President of the FEVS, said ahead of a meeting with ministers on Thursday that the new tariffs should cost the sector another €300 million.

The impact is expected to be dramatic for Cognac makers as about one out of every two Cognac bottles is sold in the US.

The FEVS said in a statement on Wednesday that it expects "tough decisions" from the government and called for more support.

"By weakening exporters, by placing them on the edge of an abyss, it is the entire wine and spirits sector, the second-largest contributor to the balance of our country, which is endangered," they wrote.

They urged France to accelerate talks with the incoming administration of President-elect Joe Biden to resolve the 15-year dispute and to refrain from taking retaliatory measures.

"On the contrary, propose their bilateral suspension, to allow a negotiated agreement to be reached," they said.