Create a free account to continue

Oregon Wine Industry Wants in on Obama's Trade Agreement

Oregon's wine industry has come into its own in recent years, spurring the growth of wineries and newly planted acres of vineyards. Now the wine industry wants in the trans-Pacific trade agreement that President Barack Obama came to Oregon to promote.

PORTLAND, Ore. (AP) — Oregon's wine industry has come into its own in recent years, spurring the growth of wineries and newly planted acres of vineyards from the California border to the Columbia River.

Now the wine industry wants in the trans-Pacific trade agreement that President Barack Obama came to Oregon to promote. Vineyard owners and wine makers say the trade deal would help open up foreign markets and increase job growth in Oregon.

"It's a big world out there, and there (are) a lot of thirsty people," said Alex Sokol of Sokol Blosser Winery. "Wine is a heavily regulated thing. But if tariffs drop, it will be that much easier and will make us more competitive."

Obama gave a shout-out to the Dayton-based winery in his speech Friday at Nike's Beaverton headquarters — spelling out how the trade deal would cut tariffs in Japan, Sokol Blosser's top export market, and increase sales.

The industry has grown substantially in recent years. Planted vineyard acreage in Oregon doubled in the last 10 years to 25,000 acres. According to a study released earlier this year, Oregon's wine industry now has a $3.3 billion economic impact on the state, including crop values, jobs, services and sales.

Wine-related jobs total about 17,000 in the state. That includes direct employment in vineyards, wineries, distribution, retail and restaurants, as well as indirect jobs in production, marketing and distribution.

A trade deal that would break down tariffs and other barriers would give an even bigger boost to the industry, said Jana McKamey, government affairs director of Oregon Winegrowers Association. The association would like to see the specifics of the trade agreement before giving the deal a full blessing, though it generally supports agreements that ease trade, McKamey said.

"Access to international markets is very important to our industry's expansion," she said. "Tariffs put American wines at a disadvantage, so having a level playing field is important for our wines to compete."

That's especially key in countries like Japan, which is one of the top destinations for Oregon's wine. Japan currently has a tariff on wine, McKamey said, which means Oregon's wines — already an expensive, premium product — sell at above-average prices. Oregon wines have a hard time competing with those from other countries, such as Australia, which has recently signed an agreement with Japan to phase out tariffs.

Japan is one of the 11 countries that are negotiating the trade agreement with the U.S.

Selling Oregon wine abroad also indirectly boosts economic activity in the state by bringing in wine tourists, who leave their money not just in wineries, but also in local hotels, restaurants and stores. Wine-related tourism contributed $208 million in revenues to the state's economy in 2013, data show.

The ability to increase exports would also boost jobs in the U.S., A to Z Wineworks founder Sam Tannahill said.

"Every 10 acres of vineyards we plant in rural areas of Oregon, that's one job. We cannot move those jobs anywhere else," Tannahill said. "The more markets we have access to, the more wine we can sell, the more jobs we create here."

Tannahill, whose Newberg-based company is one of Oregon's leading wine producers, exports his wine to seven countries and would like to export to more places. "In some places, the barriers are just too high," he said.

But critics say a trade agreement could harm agricultural workers — because that's what happened in Mexico after NAFTA, the North American Free Trade Agreement, was implemented in 1994.

NAFTA's goal was to remove barriers to trade and investment between the United States, Canada, and Mexico. But under NAFTA, as the U.S. vastly increased corn exports to Mexico, millions of small Mexican farmers couldn't make ends meet — leading many of them to cross the border illegally into the U.S. to seek agricultural jobs in places like Oregon.

"The NAFTA labor side agreement proved too ineffective in protecting farmworkers against the negative consequences of agricultural trade in both the United States and Mexico," Bruce Goldstein, president of Farmworker Justice, a national advocacy group based in Washington, D.C., said in an email.

"Any new trade agreement," he said, "is likely to have major negative consequences for many workers."

The trade deal envisioned by Obama is not a sure thing. Congress is debating whether to give Obama so-called fast-track authority to complete the deal. Obama's toughest sell is with his own Democratic allies, who fear the loss of American jobs and weakened financial and environmental rules.