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WASHINGTON (Reuters) - Tequila, the distilled spirit that fueled a decades-old margarita craze in the United States, has landed squarely in the middle of a trade fight between Mexico City and Washington.

Mexico is threatening to cut off all bulk exports of Tequila, claiming it needs to tighten quality controls on the gold-plated namebrand that is owned by the Mexican government and supposedly assures every bottle's high quality. If enacted, all Tequila would be bottled in Mexico.

Mexico is the only nation that produces the alcohol made from fermented sap from the blue agave plant.

But as is usually in the case with trade fights, there are opposing views. U.S. companies suspect that by banning bulk exports used north of the Rio Grande for individual bottling, Mexico is maneuvering to steal American bottling jobs.

Peter Cressy, president of the Distilled Spirits Council, on Wednesday called Mexico's proposal an "ill-conceived action" in violation of world trade rules.

Another U.S. industry official, who asked not to be identified, bluntly said the Mexican government was trying to "create jobs" by moving American bottling operations south.

In early August, as official Washington was mostly shut down, Mexico previewed a new regulation requiring that all Tequila would have to be bottled before export.

The Bush administration, already reeling from 3.3 million private sector job losses under its watch and sensing the potential loss of bottling plant jobs in California, Arkansas, Missouri and Kentucky, has been in contact with Mexico to protest the move, according to a U.S. Trade Representative's office spokeswoman.

The agency is hoping to head off a late-October official publication of the regulation by Mexico that could go into effect as early as next year.

Allen Johnson, the chief agriculture negotiator for the U.S. Trade Representative, told inquiring senators on Tuesday his agency was still reviewing Mexico's proposed regulations and was working with industry to try to resolve the problem.

Last year, the United States consumed 86.4 million bottles of Tequila, more than half of Mexico's total output. Eighty-three percent was shipped to the U.S. in bulk form and bottled here, according to the U.S. industry.

Mexico's Tequila Regulatory Council challenged the notion that job creation was driving the move to kill bulk exports.

Judith Meza Nixon, U.S.-Canada representative for the council, said there is evidence that handlers of bulk Tequila on both sides of the border could be eroding the drink's quality.

In a telephone interview, she said that some bulk shipments from Mexico turned out to be sugar cane alcohol or grains spirits, instead of Tequila. In other instances, U.S. bottlers were found mixing different types of Tequila together, also in violation of Mexican standards, she said.

If Mexico halts bulk shipments, the government would be "protecting the authenticity of a product," which Nixon argued was within international trade rules.

Frank Coleman, a spokesman for the U.S. distillers, said this trade dispute comes as consumption is skyrocketing. That, he said, was because of American's growing love for premium sipping Tequilas and for Tequila-based drinks.

Without Mexico's bulk Tequila, Cressy said, there is the "significant potential" for shortages.

If Mexico goes ahead with this, the United States eventually could file a North American Free Trade Agreement complaint. For now, both industries are saying they have NAFTA on their side.



09/26/03 08:24

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Montcalm wrote:Be careful they may send you low quality shit and keep the best for them.

Montcalm wrote:Be careful they may send you low quality shit and keep the best for them.

beyond hope wrote:

Montcalm wrote:Be careful they may send you low quality shit and keep the best for them.

"Tequila, now with 20% more urine!" (or was that Corona?)

Luke Starkiller wrote:

beyond hope wrote:

Montcalm wrote:Be careful they may send you low quality shit and keep the best for them.

"Tequila, now with 20% more urine!" (or was that Corona?)

Heh, that reminds me of a line from Desperado:

Pissed off American tourist: "...and your beer tastes like piss."

Mexican: "That's cause we piss in it!"

neoolong wrote:That's not all they do.

beyond hope wrote:

Montcalm wrote:Be careful they may send you low quality shit and keep the best for them.

"Tequila, now with 20% more urine!" (or was that Corona?)

beyond hope wrote:I never did like tekillya, honestly: my favorites were Bacardi 151 or Goldschlager.

Xenophobe3691 wrote:

beyond hope wrote:I never did like tekillya, honestly: my favorites were Bacardi 151 or Goldschlager.

Seriously, how could you stand drinking 151? That shit's like liquid fire, my throat felt sore for an hour afterwards

aerius wrote:The tequila shortage is bad enough as it is after some disease thing wiped out a bunch of agave plants about 5 years ago. Prices went up 50-60% and they still haven't started to come down, and now this? Good thing I don't drink tequila or I'd be mighty pissed.

Xenophobe3691 wrote:

beyond hope wrote:I never did like tekillya, honestly: my favorites were Bacardi 151 or Goldschlager.

Seriously, how could you stand drinking 151? That shit's like liquid fire, my throat felt sore for an hour afterwards

Luke Starkiller wrote:

beyond hope wrote:

Montcalm wrote:Be careful they may send you low quality shit and keep the best for them.

"Tequila, now with 20% more urine!" (or was that Corona?)

Heh, that reminds me of a line from Desperado:

Pissed off American tourist: "...and your beer tastes like piss."

Mexican: "That's cause we piss in it!"