The U.S. Dairy Exporter Blog: Market Analysis, Research & News

  • EU's Geographical Indications Pose Threat

    By Jaime Castaneda April 10, 2012

    When the U.S.-South Korea free trade agreement (FTA) went into effect in March, it opened many doors to U.S. cheese suppliers. A few, however, remained shut—not from latent protectionist fears of the Koreans, as we might have originally feared, but the strategic maneuvering of the European Commission, which is in charge of policy and negotiating agreements for the European Union (EU).

    Because of the EU government’s aggressive efforts to confiscate common (generic) food names, including many of the most well-known cheeses, U.S. suppliers will no longer be able to sell asiago, feta, fontina or gorgonzola in Korea—at least not under those names. The restriction is solely due to the EU’s demands under its FTA with Korea.

    The European Commission is pursuing a multi-pronged international effort to confiscate common names. Its strategy will have far-ranging negative repercussions on the international cheese business unless it is strongly contested. Geographical Indication (GI) provisions in Europe and within the EU-South Korea FTA are a mere example of the intentions and the extent that the EU is prepared to go in the international arena.

    Evidence abounds that the EU has made the monopolization of generic food names a priority in trade discussions around the world.

    • It is pressing to include GI provisions in potential talks with the United States that could bring GI restrictions to the domestic market.

    • It is working with China to develop a GI system that aligns with EU views. China already agreed to a “10 for 10” deal under which the two nations would swap and honor 10 of each of their GIs. (China’s cheese market expanded 20 percent annually over the past decade, became a top 10 market for U.S. cheese sales in 2011 and holds huge potential for future growth.)

    • It is working to influence Japan through exploratory FTA discussions and separately with the country’s Ag Ministry to encourage the adoption of an EU-style GI system. (Japan is the No. 3 U.S. cheese export market, with sales up 54 percent in 2011 vs. the previous year.)

    • It inserted GI provisions into FTAs with Central America, Colombia and Peru. (U.S. cheese sales to Central America grew 58 percent from 2010-2011 and Panama is another top 10 cheese market.)

    • It is working to include GI provisions in its FTA with Canada at a time when that nation is finally showing signs that it may be willing to reform its highly regulated dairy market and broaden U.S. dairy export opportunity. (Canada is the No. 4 U.S. cheese export market, and the Trans-Pacific Partnership FTA offers the possibility of significantly expanding current U.S. export access.)

    • It is processing applications in the EU to provide GI protection to danbo and havarti, despite the fact that both are Codex standardized names.

    This last point is one of the most audacious. It is shocking that the EU would even consider allowing GIs for Codex standardized cheese names.

    Then again, in a similarly shocking turn of events, a 2008 EU court ruled that parmesan is protected under the Parmigiano Reggiano GI despite being markedly different and having a very long history of manufacturing and use outside of the Parma region in Italy.

    Where does the effort end? Are brie, camembert, edam, gouda, provolone and even cheddar and mozzarella next?

    The fall-out, if the European Commission’s efforts are left unchallenged, would be disastrous for the U.S. and the global cheese industry. All cheese producers would be required to re-label products, remake marketing campaigns and reeducate buyers and consumers, a prospect that would cost billions. U.S. cheese suppliers would see the promise of emerging markets shrink considerably and could even face business upheaval here at home.

    The breadth of the problem and the resources allocated by the 27-member bloc demanded a comprehensive, coordinated global response. To meet the challenge, U.S. Dairy Export Council pulled together an international coalition of concerned companies and organizations, including dairy companies and associations from Canada, Argentina and Central America, as well as U.S. companies and organizations such as National Milk Producers Federation and International Dairy Foods Association, to form the Consortium for Common Food Names, an independent international group focused on countering the GI threat.

    The consortium, which debuted in March and held an open reception yesterday in Milwaukee in conjunction with the International Cheese Technology Exposition, seeks to draw attention to and prevent efforts to restrict the use of common food names (cheese and otherwise). It supports well-designed GIs but opposes any attempts to monopolize generic names that have become part of the public domain.

    The EU’s efforts have thrived under the radar—behind the closed doors of negotiations and in subsequent work with foreign governments through more than a dozen free trade agreements currently moving through the pipeline.

    The consortium plans to shine a spotlight on the problem by informing consumer groups, farmer associations, food processors and ag and trade officials of the damage that will be caused in their own countries if the reckless restriction of common food names is left unchecked.

    It will also work with leaders in agriculture, trade and intellectual property rights to develop and foster the adoption of a just system of GIs that preserves the right for companies to use generic food and beverage names as they have been doing for decades.

    But the effort needs the food industry’s support, particularly cheese suppliers and those supplying the critical raw ingredient for cheese—high-quality milk.

    Evidence is mounting that inaction would only cause GI restrictions to worsen with time. To find out more about the Coalition for Common Food Names and what you can do to help, visit www.commonfoodnames.com.

    (This article first appeared in Cheese Market News in April 2012.) 

    The U.S. Dairy Export Council represents dairy farmers, proprietary processors, cooperatives, ingredient suppliers and export traders. Its mission is to enhance U.S. competitiveness and increase global sales of U.S. dairy ingredients and products.

     

     

    Trade Policy Geographical Indications (GIs) EU Common food names
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