The U.S. and European wine industries reached an agreement last weekend that could result in California wineries exporting more wines to Europe.

The historic agreement, achieved after more than 20 years of discussions, gives mutual recognition to currently authorized winemaking practices of U.S. and European community producers. This, in turn allows American wineries to have access to European markets with more stability over a longer period of time. Previously U.S. practices required periodic renewals, or "derogations" as they are called in the accords, and this created uncertainty for exporters, according to the Wine Institute, a trade organization representing 887 California vintners.

Other aspects of the agreement call for recognition of wine place names of origin, with the EC recognizing the names of American Viticulture Areas (AVAs) which includes states, countries and individual areas, such as Napa Valley and all its sub-appellations. Until now, no system for recognition of those names has existed in Europe.

In addition, the agreement placates some European producers who, for many years, have had concerns about the use of some of their place names, such as Chablis, Burgundy, Champagne and Port, all of which are specific locales in Europe and have been used on U.S. winery labels for many years. The agreement allows U.S. winemakers who use those names on labels to continue doing so, as long as the labels also show an appellation of origin. Under a "grandfather" clause, only existing brands can use these terms, preserving the investment vintners have made over the years in those brands. New brands are prohibited from using those names. Not all EC producers are happy about this part of the agreement, however, and one branded it "an absurdity."

One part of the agreement that seemed to capture the headlines, probably because it was the most easily understood, called for allowing the use of wood chips in stainless steel tanks to impart an oak flavor to wines, a practice used by some American vintners rather than fermenting and aging wine in costly oak barrels. The U.S. will continue to recognize existing European winemaking practices, which include allowing sugar to be added to wine.

The agreement was heralded by California vintners. Michael Honig, of Honig Vineyard & Winery in Rutherford, who is a member of the board of directors of the Wine Institute, said that anything that levels the playing field in all foreign countries "is good. It was a great thing to get it signed. There are so many positive things happening in our industry, and this is one of them."

Honig saw the agreement as possibly the beginning of something that stretches beyond the wine industry. "If we can come together like this on wine, what else can we come together on?"

Not everyone sees the agreement as a positive step. The agreement was not signed by Germany, which has reportedly called for the EC to draft a "purity law" to prevent European producers from following American practices, presumably that of using wood chips.

This might bring about an internal battle -- Italian producers have asked for a change in EU regulations to allow the use of wood chips.

It may not be all sweetness and light from here on out. Negotiations on the next phase of the deal will begin three months following the date when the first phase goes into effect. Wine Institute officials hope to address the matter of EC subsidies to European producers during the second round of negotiations. It's reported that many other issues remain to be settled, such as the creation of a committee on wine issues, use of other semi-generic terms and other winemaking practices, geographical names, appellations, low-alcohol wines and seals of approval, according to an article in Decanter Magazine.

This was the second time in less than a year that the American and European wine industries have reached a historic agreement. Last July Napa Valley Vintners, along with representatives of the Washington and Oregon wine industries, signed a "Declaration to Protect and Promote Location" with representatives of the Port, Sherry and Champagne regions of Europe. This emphasized the importance of location to wine, the need to protect the names of those locations, the education of consumers about the importance of the origin of wines, and why it is vital to accurately label those wines.

Europe is an important export market for the United States. According to the Wine Institute, total American exports of wine last year were $658 million, with $325 million going to the EC countries, and exports have grown each year. On the other hand, European wine producers exported $2.6 billion in wine to the U.S. market last year. It's estimated that 40 percent that wine ends up in the U.S., so it was important for both parties to reach an agreement to keep the wines flowing across the Atlantic Ocean.

The agreement was signed on behalf of the United States by Rob Portman, U.S. trade representative, and most of the negotiations were handled by James Murphy, assistant U.S. trade representative.