Working Paper Category: History & Politics

There is much debate on the impact of product and process standards on trade. The conceptual arguments are complex and empirical evidence is mixed. We analyze the impact of standards and tariffs on the dramatic rise and fall of the raisin trade between France and Greece in the course of 25 years at the end of the 19th century. The case illustrates how product standards can be used to address consumer concerns and to protect producer interests. Economic conditions and French policies first stimulated Greek raisin imports. Later, changing conditions and political pressures led to the introduction of tariffs and wine standards which caused major declines in Greek exports and ultimately the bankruptcy of the Greek economy. Interestingly, this trade episode of more than a century ago still has a regulatory legacy today as it is the origin of the EU’s definition of wine.

While one cannot speak of sustained French immigration to the American colonies, some notable examples can be cited. The Labadists were mystics who lived communally on their 4,000 acre Maryland farm. There were the French settlers of Gallipolis in Ohio who, it appears, produced a wine so poor in quality it was named méchant Suresne after a wine known for its sourness produced near Paris. The arrival of French Huguenots in South Carolina is of particular interest because, for the first time, a large group of settlers reached the New World with the primary aim of growing grapes. They had left France for England to escape religious persecution and in 1763 petitioned the British Government to provide them with land in South Carolina so that they could “apply themselves to the cultivation of vines and of silk.” The request was approved. Setting sail a year latter, the Huguenots reached South Carolina founding the township of New Bordeaux in the southern part of the colony. They were joined four years later by another group of co-religionists lead by the forceful Louis de Mesville de Saint Pierre. But now came a setback. The colony’s governing body refused to provide the settlers with the funds needed to purchase vine cuttings. Saint Pierre thereupon decided to return to England and appeal for financial aide to Lord Hillsborough secretary for the American Colonies, but to no avail. Rumors had it that Hillsborough had received a 250,000 British pounds bribe from French wine merchants dismayed at the prospect of losing the lucrative American and British markets.

The 1860–1970 period is a particularly interesting period to study wine trade because of dramatic changes in the wine markets and trade over the course of a century. The dramatic changes in trade flows were caused by both “nature” and “men”. Mediterranean wine trade represented around 90% of global wine trade and France was the world’s leading exporter. The arrival of Phylloxera devastated French vineyards and stimulated Spanish and Italian wine exports. When French wine production recovered, French winegrowers pressured their government to intervene, resulting in high tariffs on Spanish and Italian wines and Greek raisins. The protectionist trade regime contributed to the bankruptcy of Greece and to the substitution of wine trade from Spain and Italy to France’s North African colonies. When Algeria, Morocco and Tunisia became independent, France imposed high wine tariffs, effectively killing their wine exports. The decline of the wine industry in North Africa coincided with the trade and policy integration of the South European wine exporters in the EEC—the predecessor of the EU.