Senior Staff Writer, Masaru Yamada
“Is it only the producing areas in Italy which have the right to name their cheese Parmesan Cheese?”
Protection of geographical indications is becoming one of the major points at issue in the agricultural sector negotiations for a free trade agreement between the United States and the European Union. As markets for value-added farm products are growing rapidly worldwide, conflicts between them have grown fiercer than ever before.
55 out of a total of 100 U.S. Senators jointly sent a bipartisan letter on March 11 to U.S. Secretary of Agriculture Tom Vilsack and U.S. Trade Representative Michael Froman, strongly criticizing the EU’s stance concerning the GIs and urging the U.S. government to push back on their claims. In the letter, the senators expressed dissatisfaction against the EU insisting on exclusive rights to common cheese names such as Feta and Parmesan – names popularly used in the U.S. “In country after country, the EU has been using its free trade agreements to persuade its trading partners to impose barriers to U.S. exports under the guise of protection for its geographical indications,” the letter argues.
The EU has recently been including GI protection in free trade agreements it has signed with different countries. It has exchanged with each of the countries lists of GIs which they want to protect, and agreed to exercise control over violations.
Why is the EU so eager to protect GIs? It is because the EU’s farm products with potential for further growth in exports are those protected by GIs. The top three products exported from the EU are spirits, wine and cereal preparations, all of which are products people tend to have brand preferences for.
In order to increase sales of brand products with a positive image of Europe, it is necessary to strictly eliminate counterfeits. To continue growing, it is totally indispensable for the EU to spread the GI protection system worldwide.
The U.S. is not happy with such a move, because high value-added products are becoming increasingly important also for U.S. exporters. Until around 1980, more than half of exports from the U.S. were raw products such as corn, wheat and soybeans. Although grains continue to be the mainstay of American exports in the 2010s, raw materials occupied less than 40 percent of total exports. Value-added items are increasing in beef and processed food products, with premium cheese brands seen to have high growth potential.
The U.S. had been a dominant exporter of agricultural products in the past, but recently the EU is pressing hard. According to the EU statistics, the U.S. was the world’s top exporter of farm products in 2012 with 117 billion euros, followed closely by the EU with 114 billion euros. Brazil, the third largest exporter, is also closing on the U.S. in the area of raw products such as soybeans and corn. Since it is getting difficult for the U.S. to compete with low-price products from South American countries, the only way left to survive is to increase exports of high value-added products.
If U.S.-made cheese products are treated as counterfeits at home and abroad, the U.S. strategy of increasing sales of premium products will be shaken to its foundations. That is why the U.S. is fighting so desperately against the EU’s moves to spread the system of GI protection worldwide.
(March 23, 2014)