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New export barrier: EU work on geographical indication rules

LA QUINTA, Calif. — Just as the U.S. dairy industry is getting prepared to ramp up exports, a new barrier has appeared on the horizon: European Union efforts to use free-trade agreements to convince other countries to impose “geographical indication” rules that would make it illegal for U.S. companies to use the names of cheeses and other products that originated in Europe.

Craig Thorn, a former Foreign Agricultural Service officer who is now a trade lobbyist with the firm DTB Associates, told a group of dairy processors here last week that while U.S. trade officials and agribusiness lobbyists are opposing the efforts, EU diplomats have already succeeded in getting a geographical indicator provision in the EU free-trade agreement with South Korea, and are mounting similar efforts in negotiations with other countries.

“It is a tremendous impediment [for U.S. producers] and a tremendous advantage to Europe,” Thorn said at the annual meeting of the International Dairy Foods Association last Wednesday.

European food producers, particularly those producing wine, cheese and certain meats, have complained for decades that producers in the “new world” — principally the United States, Canada, Australia, New Zealand and a few Latin American countries — have used European names such as Champagne and Parma to sell foods, when those names should be used only if that is where the products originated.

American producers have responded that decades of marketing products such as Chablis white wine and Parmesan cheese have increased sales worldwide for these items.

The issue has become increasingly complicated because some European countries have taken other countries to court. The term “feta” cheese is now restricted to cheese coming from Greece, within the European Union. There is also the question of whether the rules protect compound names such as “Parmigiano Reggiano” or the term’s component parts.

The European countries have reached agreements with some other countries, including the United States, for the protection of certain names, but as part of the Doha round of multilateral trade negotiations, the European Union has proposed expanding the system of geographical indications and making the enforcement of those rules easier and stricter.

Since the Doha round does not appear to be moving forward, the European Union has begun including geographical indications in free trade agreements, Thorn said.

The European Union has made its greatest progress in its trade agreement with Korea, which contains a specific provision protecting certain products. The European Union is now trying to achieve the same objective in negotiations with a number of Latin American and Asian countries, including China.

The Office of the U.S. Trade Representative is trying to “mitigate the damage” in countries with which the European Union has reached agreements, and is also developing a strategy to try to stop the European offensive in other targeted countries, Thorn said. He added that it is “definitely more difficult” to address the issue if a country has already reached agreement with the European Union.

Last year, while the United States was finalizing negotiations on the U.S.-Korea free trade agreement, the Korean government agreed in an exchange of letters with U.S. Trade Representative Ron Kirk to clarify how far the geographical indication rights would go. See links below. The letter says, for example, that the term “Parmigiano Reggiano” would be protected but that the word “parmigiano” would not.

Although some U.S. lobbyists have previously contended that trademarks — which give rights to the names but do not require that a food, wine or spirit be produced in the place that it originated — should be the internationally accepted form of protection, geographical indications have gained legal acceptance.

Ken Roberts, a Kraft lobbyist who appeared on a panel following Thorn’s presentation, said afterward that geographical indications are a legitimate form of intellectual property protection.

“In extending that protection, the fundamental question becomes whether the procedure used in third markets (those outside the EU and U.S.) are objective and allow for full consideration of the facts surrounding the product,” said Roberts, who is also a former Foreign Agricultural Services officer. “That’s important to avoid losing the use of common cheese names in these markets.”

“It’s also important at a time when the U.S. dairy industry weighs export opportunities against a backdrop of possible changes in domestic dairy policy,” he said.