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U.S. and Canada announce settlement of trade dispute.

The U.S. and Canada agreed to settle their beer trade dispute last week. The settlement largely resolves a trade fight over restrictions imposed on U.S. and other foreign beer by Canadian provinces, principally Ontario, and gives U.S. brewers greater access to Canadian retail outlets.

Ontario will also reduce its minimum prices and other fees that U.S. brewers claim have made their beer less competitive. Under the terms of the settlement, punitive duties imposed by both countries last year will be dropped.

The settlement will allow Ontario to maintain its "environmental tax" of ten Canadian cents on each aluminum can of beer. Since most U.S. beer exported to Ontario is in cans, U.S. brewers viewed this tax as a restraint on trade.

In a concession to the U.S. position, Ontario has agreed to lower the minimum price on a case of beer by two Canadian dollars, to (CDN)$20.50 a case. The province also agreed to reduce distribution charges on imports.

The agreement will allow other provinces to enact minimum price rules and environmental taxes similar to those employed by Ontario. The U.S. reserved the right to terminate the agreement within 30 days if it finds new provincial laws discriminatory.

The agreement was negotiated by U.S. Trade Representative (USTR) Mickey Kantor and Canadian Trade Minister Tom Hockin. Hockin was quoted as saying, "This agreement averts a beer war."

National Beer Wholesalers Association (NBWA) president Ron Sarasin applauded the agreement. "The USTR should be congratulated on the success of the settlement of this dispute with Canada which will eliminate most trade restrictions that have disadvantaged U.S. beer. In addition, the retaliatory duties imposed by the U.S. have threatened continued importers of Canadian beer in the U.S. This has been a particular concern to our wholesalers along the northern tier."

The matter received some high level discussion at last month's G-7 summit, when Canadian prime minister Kim Campbell broached the matter with President Bill Clinton.
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Title Annotation:beer trade
Publication:Modern Brewery Age
Date:Aug 16, 1993
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