EU’s trade strategy on food favours the few at the expense of the many
EU member states negotiating the EU-US free trade agreement, TTIP, are defending the interests of just some member states and a very small number of producers. Europe would be better off focusing on ways to improve commerce for all, writes Allen Johnson.
Allen F. Johnson was an Ambassador at the Office of the United States Trade Representative (USTR) in the Executive Office of the President from April 2001 until September 2005. During that time he served as the Chief Agricultural Negotiator under former U.S. Trade Representative Robert Zoellick.
Europeans take enormous pride in their food – specifically, in the “heritage” foods of their regions. And why shouldn’t they? The cheeses, wines, meats – even specialty fruits and vegetables – are what define the very character of some of Europe’s most diverse regions. So what harm can come to Europeans in protecting the names of these specialty foods? It would seem that the system of geographical indications (GIs) – the program designed to do just that, would by its very nature be harmless and beneficial. But when it comes to the EU’s current approach to trade negotiations, this is true only for a handful of member states, at the expense of the rest.
The GI program, originally devised to protect consumers against misleading information and help producers better develop markets for their products, has over time become a means for some European producers to claim the exclusive right to use certain food and beverage denominations, which are common food names, in attempt to eliminate competition. Not surprisingly, the system has already created confusion and disputes, including within the EU itself, as the exclusive use of such common names as “parmesan” and “feta” has been restricted to Italian and Greek producers respectively, even though these types of cheeses have long been produced in several other European Countries.
This overreach is now being forced on other countries by the EU through the use of free trade agreements (FTAs), claiming a form of food colonialism for certain generic names with results that are at odds with the very principles of free trade, competition, consumer choice, and rewarding producers for their hard work and dedication.
Take for instance producers in Central America – many of European descent and whose families have for generations produced cheeses and built markets for their products – will no longer be able to use the names “parmesan” or “manchego” (just to name a couple) as a result of the recent trade agreement with the EU. Like their European producers in many member states, they now must also watch as European exporters from a few countries expropriate the markets they so proudly created and served.
Observers would probably assume that most European producers are the winners in this high stakes game. However, as a recent European Commission study points out, the EU food GI volume and value are concentrated primarily in a few states. For example, 90% of the sales value of the EU’s GI protected cheeses was attributed to just three countries in 2010: Italy, France and Greece. In addition, in recent trade negotiations the European Commission seems to have placed an outsized focus on the interests of a just subset of EU producers rather than focusing on what is beneficial for the larger majority of European producers.
For products such as “parmesan”, “asiago”, “muenster” and “feta” amongst others, EU negotiators have a distorted sense of priorities as they are willing to forgo market access opportunities for European producers and industries in exchange for very narrowly targeted gains. But what is really surprising is that other EU member states seem to be passively accepting to pay painful trade-offs for the interests of just two or three member states and for the benefit of a very small number of producers.
Consider, for instance, the EU’s recent FTA with Canada. Some European nations and producers clearly lost when the EU insisted on exaggerated GI restrictions for some common food names. EU milk powder, commodity cheese as well as other sectors were traded in exchange for accepting generic terms to satisfy just two EU member states, Italy and Greece.
Now, in the current TTIP negotiations with the U.S, the same scenario is unfolding. Rather than taking advantage of this unique opportunity to boost the economies on both sides of the Atlantic, the EU seems set to propose negotiating terms that would put TTIP itself in jeopardy in order to benefit these producers. The EU Trade Commissioner De Gucht suggested to the UK the House of Lords that the EU would need to sacrifice more European trade interests at the altar of their overreaching EU GI negotiating position. This is why the U.S. side has made it absolutely clear that they will not agree to impose anti-consumer trade and competition barriers by registering controversial GIs.
All EU member states should be aware that the EU is spending an inordinate amount of time, capital and energy to battle for a handful of producers, instead of working for ways to help most of Europe’s farmers and food manufacturers do better in the world. Europe would be better served by focusing on ways to truly improve commerce for all of EU’s quality food products and widening the choice for consumers globally.