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Trade in Tequila Agreement

On January 17, 2006, in Washington DC, U.S. Trade Representative (USTR) - Ambassador Rob Portman and Mexico’s Secretary of Economy Sergio Garcia de Alba signed an historic agreement on cross-border trade in tequila. This signing ceremony was the culmination of two years and 10 rounds of negotiations between the United States and Mexico.

Tequila is an alcohol beverage distilled from the agave plant and has been given worldwide recognition as a distinctive product of Mexico. As such, while ‘Tequila’ can only be produced in Mexico, bulk shipments of finished tequila, destined for bottling abroad, had been allowed. In August 2003, the Mexican Standards Bureau announced a proposal that the official standard for tequila would be amended to require that all tequila be ‘bottled at source’, in order to be labeled as tequila. This would have created a de facto ban on exports of bulk tequila.

If the draft standard had been adopted, it would have threatened the huge investments U.S. companies have made to build bottling plants and develop brands in the United States. Prompt action by the USTR and the cooperation of Mexican officials allowed tequila to flow uninterrupted for two years during the negotiations. In addition, during the signing ceremony, Ambassador Portman stated, "I want to thank the Alcohol and Tobacco Tax and Trade Bureau of the Department of Treasury, as well as the Departments of State and Commerce, for their invaluable assistance in these negotiations."

The U.S.-Mexico tequila agreement will ensure that bulk exports of tequila from Mexico to the United States, valued at $400 million per year, continue without interruption. The U.S. is Mexico’s largest export market for tequila, accounting for 50 percent of Mexico’s total production.

If you have any questions regarding this agreement please contact the International Trade Division.