U.S. May be Ready to Resolve Cheese Impasse to Clinch EU Trade Deal - Global Trade Magazine
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  September 11th, 2015 | Written by

U.S. May be Ready to Resolve Cheese Impasse to Clinch EU Trade Deal

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  • Thus far, the U.S. allows geographical indicators to be protected as trademarks.
  • There are five reasons why the U.S. may be willing to strengthen protection for geographical indicators.
  • Stronger protection of geographic indicators would offer significant trade benefits to U.S. exporters.

Next month, the European Union and the United States will likely resume their negotiation of the Transatlantic Trade and Investment Partnership (TTIP).

One area that has tripped up these high-stakes trade talks concerns the labeling of cheese and other foods. In many countries, specific laws exist to protect what is generally referred to as geographical indications.

These indicators identify the geographical source from which a product derives its essential quality, reputation or other characteristics. Examples include Champagne sparkling wine, Scotch whisky, and Feta cheese.

Thus far, the EU and the US disagree over how these indicators are to be protected. But the U.S. may be more willing to increase protection of geographical indications than many expect.

Countries in the Old World advocate for strong protection of geographical indications. They remain concerned about consumers being confused as to the origin and qualities of products. They also argue that unauthorized use will tarnish established reputations while diluting products’ authenticity.

Countries in the New World generally oppose strong protection of geographical indications. They contend that most products can be replicated almost anywhere today.

They also claim that several geographical indications – such as Champagne, Feta and Gouda – have long become generic terms. In some cases, similar names have already been registered as trademarks. A prohibition on their commercial use would damage businesses while creating consumer confusion.

Thus far, the US has not offered independent protection to geographical indications. Instead, it allows these indicators to be protected as trademarks. Brunello di Montalcino, Cognac, Darjeeling and Jamaica Blue Mountain coffee are all currently protected as certification marks in the U.S.

There are at least five reasons to suggest the U.S. is increasingly willing to strengthen protection in this area.

First, the protection of geographical indications has already received growing support from U.S. industries. In 2007, Napa Valley Vintners successfully secured protection for Napa Valley as a U.S. geographical indication in the EU. A 2013 industry study also provided a long list of potential US geographical indications.

Second, the U.S. continues to negotiate bilateral and regional trade agreements with countries that have offered strong protection of geographical indications. During these negotiations, compromises on how to protect these indicators will inevitably be reached. Many U.S. free trade agreements already include provisions addressing the potential conflict between the trademark system and the protection of geographical indications.

Third, stronger protection of these indicators would offer significant trade benefits to U.S. exporters. It would harmonize labeling standards while reducing marketing costs. If U.S. products are of recognized qualities or reputations, foreign consumers will select these products and enhance sales.

Fourth, greater protection of geographical indications would benefit US consumers by enabling them to purchase authentic products locally.

Finally, European countries and industries continue to shame the US into offering stronger protection of geographical indications. In January 2013, the champagne lobby strongly protested the listing of Korbel Natural Russian River Valley Champagne on the menu of the second Obama inauguration dinner.

Although the US is unlikely to volunteer to strengthen protection of geographical indications, it may be willing to do so if the EU offers the right concessions. The TTIP negotiations, despite ongoing challenges, can serve as a platform for the two trading powers to narrow their differences.

 

Peter K. Yu and Irene Calboli are professors of law at Texas A&M University.