A new agreement governing the wine trade between Australia and the European Union enters into force on September 1 2010, the European Commission said in a media statement.

The agreement replaces one signed in 1994.

The new agreement "safeguards the EU's wine labelling regime, gives full protection to EU geographical indications, including for wines intended for export to third countries, and includes a clear Australian commitment to protect EU traditional expressions," the European Commission said.

The agreement also provides for the phasing out of the use of a number of important EU names such as Champagne and Port on Australian wines within a year of the agreement coming into force.

"The agreement provides important safeguards for EU wine interests. It ensures the protection of Geographical Indications and traditional expressions for EU wines in Australia and beyond", the statement quoted Dacian Cioloş, Commissioner for Agriculture and Rural Development, as saying.

"The agreement is a win-win outcome and achieves a balanced result for European and Australian wine makers. Crucially, we have obtained the commitment that Australian wine producers will phase out the use of key EU Geographical Indications and traditional expressions for wine. This is of utmost importance for European producers".

The agreement provides for the immediate protection of other EU Geographical Indications for wines.

For the use of some terms, phase out periods have been agreed. In particular, Australian producers will not be able to continue the use of important EU names such as "Champagne", "Port", "Sherry" and other European geographical indications, along with some traditional expressions such as, "Amontillado", "Claret", and "Auslese" from September 1 2011 onwards, in other words, a year after the entry into force of the agreement.

The new agreement safeguards the EU wine labelling regime, by listing optional particulars which may be used by Australian wines (i.e. an indication of vine varieties, an indication relating to an award, medal or competition, an indication relating to a specific colours, etc.) and by regulating the indication of vine varieties on wine labels, the statement said.

The new agreement also outlines the conditions for Australian wine producers to continue to use a number of quality wine terms, such as "vintage", "cream" and "tawny" to describe Australian wines exported to Europe and sold domestically.

The agreement was signed in Brussels on December 1 2008. The Australian authorities informed the European Union on July 27 2010 that they had completed their ratification procedures.

In 2009, EU wine exports to Australia were worth 68 million euro and Australian exports to the EU were worth 643 million euro.

The ban in the agreement on the use of "important EU names" such as Port and Sherry is similar to a similar agreement agreed some years ago between the EU and South Africa.