BRUSSELS (Reuters) - European Union plans to seal the world’s largest free trade deal with the United States are threatened by intractable differences over food names, none more so than the right of cheese makers to use the term “feta”.
Negotiators talk of accelerated progress and hope to thrash out a skeleton agreement on a Transatlantic Trade and Investment Partnership (TTIP) within a year, aiming for a major boost to growth in the advanced Western economies.
But geographical indications (GIs), a 1,200-long list ranging from champagne to Parma ham, present a major headache.
At the same time as euro zone leaders are ordering Greece to balance its budget and liberalize its product markets, EU trade negotiators are fighting to defend its signature cheese.
GIs are a cornerstone of EU agricultural and trade policy, designed to ensure that only products from a given region can carry a name. To the United States, it smacks of protectionism.
“It’s politically extremely important in Europe. As (the EU) phases out direct agricultural support, there has to be a trade-off by promising to do more in trade policy,” said Hosuk Lee-Makiyama, director of the European Centre for International Political Economy.
“For 20 years they have been fighting about it at the World Trade Organisation even if the economic value is disputed.”
EU member states will have to approve any deal and will need food name protection as compensation for EU farmers facing a flood of U.S. beef and pork imports.
Agriculture is not a sizeable part of either the EU or the U.S. economy, but farmers retain political muscle, as French livestock and dairy producers showed this week by forcing the government to offer aid after protests including road blockades.
Washington does not object to protection of niche items such as British Melton Mowbray pork pies. But negotiators face a very difficult task to find a balance for widely produced feta, Parma ham or parmesan, the biggest maker of which is America’s Kraft Foods (KHC.O).
The EU introduced GIs and designations of origin in 1992, securing protection for Greek feta, which means “slice”, 10 years later when it declared that non-Greek producers’ use of the term was “fraudulent”.
It is a view echoed by Christina Onassis, marketing manager at the Lytras & Sons dairy in central Greece. She describes the unique plants and microflora of Greece’s mountainous regions and says feta “imitations” mostly use cow’s milk.
“For 6,000 years, Greece has produced continuously using milk from ewes and goats,” she said. “We also ripen the cheese for days, which does not happen in any other feta production.”
The issue is about more than just national pride for near-bankrupt Greece. Its feta exports rose 85 percent between 2007 and 2014 to 260 million euros, and sales to countries outside the EU more than doubled.
U.S. agricultural and trade experts generally recognize the region-specific terms such as “Gouda Holland” or “Camembert de Normandie”, meaning that U.S. producers can still make and name their own gouda and camembert cheeses.
However, they argue that the European Union has gone too far by including the likes of gorgonzola and feta - terms they say are not region-specific but generic like cheddar or mozzarella, which do not have GI status.
“Show me on the map where feta is?” asked one U.S. trade negotiator.
In fact, under EU law, the feta-producing region covers almost the whole of the Greek mainland plus the island of Lesbos. Only milk from here can be called feta.
The European Commission says names can be protected even if they are not linked to a particular place. Feta, it says, is so closely connected to Greece as to be identified inherently as a Greek product.
In 2012 several non-European food producers and associations, many from across the Americas, formed the Consortium for Common Food Names (CCFN) to fight what they see as Europe’s appropriation of generic food terms.
“There’s nothing wrong with GIs, but is something a true GI or just a method of production?” said CCFN executive director Jaime Castaneda. “Most consumers do connect feta with Greece, but most also connect cheddar with England but it does not have to be made there.”
U.S. producers, he says, could lose billions of dollars in income if they are forced to rename their products.
Even before an EU-U.S. free trade deal, Castaneda says U.S. businesses are already affected in countries like South Korea, whose trade accord with Europe includes GI protection.
“It’s affecting us substantially in international markets, such as Korea, by preventing exports,” he said. “You see it too at international food shows in Europe. This is a never-ending issue.”
Ron Buholzer, president of the family-owned Klondike Cheese Co. in Wisconsin, which makes award-winning feta and muenster cheeses, shares that view, deeming it outrageous that anyone would claim sole ownership of these names.
“This is an economic issue for us, certainly, but it’s also personal – it’s about what’s right and fair,” Buholzer said.
The United States says the EU system is unfair because many American producers of traditional products are immigrants from Europe or their descendants, such as the Buholzer family.
It also notes that EU members have had doubts.
Both Denmark and Germany took the Commission to court over its moves to grant Greece the exclusive right to use the name feta, with initial success in 1999 before losing in 2005.
A compromise was found in the EU-Canada trade accord (CETA), allowing Canadian producers already making “feta” or “gorgonzola” to continue doing so, while new entrants would have to adopt other terms such as “feta-style”.
Greece and U.S. dairy exporters have already called this unacceptable, highlighting the difficulties that lie ahead.
Reporting By Philip Blenkinsop; By Paul Taylor