Washington Insider -- Monday

Geographical Indicators and the EU

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

USTR's Doud Says Pork is 'Tip Of The Spear' in Trade Disputes

Pork is one of the key U.S. commodities that trading partners have hit in retaliatory trade actions according to U.S. Trade Representative chief ag negotiator Gregg Doud.

"Let's be frank, the lead tip of the spear in all of this right now is your pork," Doud told pork producers at the World Pork Expo in Des Moines, Iowa.

More than 14% of the $140 billion in annual U.S. ag exports have been hit or will likely be hit by retaliatory tariffs by U.S. trading partners, he noted. Doud also expressed concern at the Japanese market where the European Union (EU) is poised to make gains.

"I am very concerned about the situation with Japan," Doud stated.

Trade talks with the UK after Brexit are one hope Doud has to bolster the U.S. ag export situation and the agreement to reopen the Argentine market to U.S. pork was a win for the U.S. and hog farmers.

But Doud also warned, "These things now that we have to fix are very, very difficult. This is going to get a little more difficult here in the short term."

USDA's Mckinney to Lead U.S. Ag, Food Trade Mission to Japan

A trade delegation comprised of U.S. business and state government leaders and led by USDA Undersecretary for Trade and Foreign Agricultural Affairs Ted McKinney will visit Japan June 11-15.

McKinney comes off a China trade mission in late May where one of the issues on the table was getting China to lift its ban on U.S. poultry. The U.S. maintains China's ban – put in place during the U.S. outbreak of avian influenza – is no longer valid since it has been a more than a year since the last outbreak.

The mission in Japan will focus on efforts to expand "export opportunities for U.S. food and agricultural products," FAS said.

"Japan is already a top market for U.S. farm and food products, but there are many new opportunities still waiting to be tapped there,” McKinney remarked. “Japan is an import-dependent economy and its 130 million consumers have a real affinity for U.S. food products because of their quality, affordability and safety. I’m eager to return to Japan and continue exploring all the ways we can grow U.S. agricultural exports there."

For the US, Japan represents "one of the most important and stable global markets for U.S. agricultural products, especially high-value goods," FAS wrote about the mission. And the U.S. "is already the country’s top supplier of imported food and agricultural products, enjoying a 25-percent market share."

According to FAS, participants in the mission include leaders from the local departments of agriculture of American Samoa, Arizona, California, Colorado, Hawaii, Idaho, Kansas, Montana, Nebraska, Nevada, New Mexico, Wyoming, Utah, Washington and Oregon.

Washington Insider: Geographical Indicators and the EU

The New York Times had a little fun this week with the murky world of food labels — and the enormous barrier they can mean for commerce in food. It focused on whisky, and noted that to many connoisseurs, a name that includes “glen”, such as Glenfiddich or Glenmorangie evokes the “moody Scottish countryside, with images of rolling hills and glens, or valleys.”

As a result, the European Court of Justice said last week that a German distiller’s use of the term “glen” could mislead or confuse customers about the origins of its beverage, potentially suggesting it was a product of Scotland.

Europe has been here before, the Times says. It strictly enforces “geographical Indictor” polices that dictate what food can be called and what ingredients can go into certain well-known dishes. Countries in Europe zealously guard their gastronomic heritage, and the European Union itself maintains a list of “protected” dishes and drinks from various parts of the region. Even the use of generic terms like milk and cream is regulated.

As a result, cases like the battle over the use of the word “glen” are far from unusual and fights over names for cheeses are especially bitter.

In 2008, the European Court of Justice decided that even in translation, “Parmesan” was so evocative of the hard cheese, known in Italy as Parmigiano-Reggiano, that it would not allow cheese made elsewhere to be labeled Parmesan.

There are many such examples, the Times says. In Europe, “feta” can be used only to refer to the crumbly Greek product. As a result, cheese makers in northern England that offer a feta alternative have to market it as “fettle.”

As global markets for food products grow, the consequences of such decisions extend beyond Europe. For example, China agreed last year to respect Europe’s food protection rules (including for feta). The regulations have, however, led to unresolved frictions during trade talks between the EU and United States. House Speaker Paul Ryan, R-Wis., insists on his state’s right to make feta, prompting a Greek lawmaker to bemoan the “risk of mass imports of counterfeit feta into the EU.”

The region’s highest court has also had to wade into the sticky issue of recipes and how companies are allowed to label their products. Last year, the European Court of Justice decided that labels such as “milk,” “butter” and “cheese” must have ingredients derived from animal products. That means a German company that sells dairy alternatives like “Soyatoo tofu butter” should not use the term “butter” while marketing its wares.

And in 2003, the court ended the so-called chocolate wars by deciding which products were worthy of being called chocolate. Officials in Spain and Italy had forced countries like Britain and Denmark to relabel their items as “chocolate substitutes” because they included vegetable fats other than cocoa butter. But the court eventually decided that this was an impediment to the free movement of goods.

Drinks and desserts are included in the regulations, too. In December, the European Court of Justice ruled that a German discounter was allowed to sell its “Champagner Sorbet” against the wishes of Champagne producers, who have been fiercely protective of their luxury brand — but only if the retailer could prove that Champagne was a distinct part of the flavor.

Still, the Scotch Whisky Association has been vigilant in trying to protect its brand and reputation, and so took the maker of Glen Buchenbach, a small German distiller called Waldhornbrennerei, to court. It argued that by using the term “glen,” the German company had infringed on the protected status of Scotch whisky.

The Congressional Research Service (CRS) reviewed the issue and notes that some food producers benefit from the use of GIs by giving certain foods recognition for their distinctiveness, differentiating them from other foods in the marketplace. In this manner, GIs can be commercially valuable.”

CRS says the use of GIs has become a contentious international trade issue, particularly for U.S. wine, cheese, and sausage makers involved in trade between the United States and the EU and are among the agricultural issues that have been raised in the ongoing trade talks.

Many U.S. food manufacturers view the use of common or traditional names as generic terms and the EU’s protection of its registered GIs as a way to monopolize the use of certain wine and food terms and as a form of trade protectionism.

So, we will see. Certainly, in the current anti-trade political environment, a fight as tough as that between the U.S. and the EU is unlikely to proceed far or rapidly — even though the courts end up attempting to work through some of the worst conflicts. Increasingly, with the recent frictions in the G-7, it appears that all and any global trade issues will face potential complications that should be watched closely by producers as they emerge, Washington Insider believes.

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