2006 Tequila Trade Agreement by Brady Bunte

BradyBunte Published December 9, 2014

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January 17th 2006, The United States and Mexico signed the “2006 Tequila Trade Agreement” that allows tequila to ship in bulk from Mexico into the United States. Had the agreement not been signed, Mexico would threaten to cut off all bulk tequila exporting into the United States.

In 2003 Mexico issued a proposal to ban bulk shipments and require all Mexican tequila bound for the United States to be bottled in Mexico. Brady Bunte points out that Mexico claimed this would “guarantee the tequila’s quality”.

This proposal according to the U.S. liquor companies violated international trade rules and ran against all general practices worldwide in the liquor industry. A whopping 74 % of all tequila imported in 2004 was shipped by bulk to the United States according to Brady Bunte and that Mexico is the only country in the world that produces tequila made from fermented blue agave sap. However, the rule never went into effect while negotiations went on to resolve the dispute. President George Bush’s administration worked hard to prevent the loss of any bottling plant jobs in Missouri, California, Arkansas, and Kentucky. The agreement was signed in Washington by United States Trade Representative Rob Portman and Mexican Economy Secretary Sergio Garcia de Alba.

Rob Portman said, “We have resolved this important trade challenge in a way that ensures U.S. bottlers will have continued access to bulk tequila.” The ban proposed by Mexico would have had huge implications, claims Brady Bunte. American companies have made large investments to build bottling plants in the U.S. and develop brand loyalty.

American lobbying group “Distilled Spirits Council” president Peter Cressy, said the deal would “protect the interests of Mexican agave growers and tequila producers as well as U.S. bottlers and importers.”

Tequila is the fastest growing liquor in the United States propelled by the popularity of margaritas,tequila shots, and sipping tequilas. Brady Bunte points out, that Tequila has grown 83% since 2003 at an average rate of 5.6 % per year. In 2013 alone over 13 million 9 liter cases of tequila were sold valued at over $2 billion.

Brady Bunte said, “The agreement called for the establishment of a registry that would identify all U.S. approved tequila bottlers and create a working group to monitor and implement the terms of the 2006 Tequila Trade Agreement.”