updated 3/10/2006 1:42:34 PM ET 2006-03-10T18:42:34

The European Union and the United States signed a new wine deal Friday that allows the U.S. to export wines made using practices many European vintners shun.

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Talks on a “more ambitious” agreement are slated to start within 90 days, as both sides build on last September’s breakthrough that recognizes each region’s winemaking practices after 20 years of haggling.

Americans will now be able to sell woodchip-aged wines throughout Europe, a move some European winemakers fear will undermine their traditions as they face aggressive competition from a host of New World wines.

A shudder runs through some Europeans at the thought of changing the way they age wine. EU winemakers use expensive oak barrels that endow distinctive flavors.

American winemakers can use a far cheaper option to get the same effect — adding woodchips to wine fermented in metal vats. Commercial winemakers in Europe are banned from doing this, although scientific tests are allowed.

Germany — which refused to back the pact — last year called these practices unacceptable, calling on Europe to draft a “purity law” to stop European producers from following in American footsteps.

However, Italy has asked for a change in EU law to allow the use of woodchips.

The United States and Europe are each other’s most important markets for wine exports. Annual EU wine exports to the U.S. are worth more than 2 billion euros ($2.37 billion), around 40 percent of EU wine exports. U.S. wine exports to Europe are far lower — at $487 million in 2004 — but are increasing steadily.

The deal signed Friday lightens the load on wine exporters by clearing away some of the certification barriers they face. Both sides agreed to recognize existing wine practices and the EU has promised to accept new U.S. methods once they have been analyzed and win the backing of the European wine industry.

The agreement also paved the way for a host of other issues to be solved in a calmer atmosphere — in informal talks instead of filing official complaints at the World Trade Organization.

“Like a good wine, this agreement took time,” said U.S. Trade Representative Rob Portman. “But by helping to establish predictable conditions for bilateral wine trade it is clearly a win-win situation for U.S. and EU winemakers.”

The agreement was cheered by winemakers in the U.S., who believe Europe’s acceptance of American winemaking techniques will help boost exports.

“This is an important first step in leveling the playing field, and establishes an environment for continued communication,” said Robert P. Koch, president and CEO of the Wine Institute, which represents the interests of California wineries. He added that the group hopes EU subsidies to its winemakers will be reduced in the next round of World Trade Organization negotiations.

The new talks will have settle the status of low-alcohol wines and build on an American promise to restrict the EU’s sole right to use the names port, sherry and champagne for European-made drinks. Under EU law, only sparkling wine from France’s Champagne region can bear the name. Europe wants the Champagne restriction extended worldwide.

The U.S. administration will ask Congress to change the status — and limit the use of — 17 European names on American wines such as Burgundy, Chablis, Champagne, Chianti, Sherry and Tokay that have until now been considered “semi-generic” in the United States.

In return, the EU will accept U.S. regional names such as Long Island and Applegate Valley.

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