THE TTALK QUOTES 

On Global Trade & Investment

 

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No.11 of 2015 

WEDNESDAY, FEBRUARY 4, 2015      

 

   

Filed from Portland, Oregon  

     

Click here for yesterday's quote on chickens and American trade.
CONGRESS, CURDS AND WHEY - A GI DISCUSSION

"Thank goodness we don't have an Italian community named 'cheese.'"

Senator Pat Roberts
January 27, 2015
CONTEXT
Senator Pat Roberts, a Republican from Kansas is a member of the Senate Finance Committee and the new chairman of the Senate Committee on Agriculture, Nutrition and Forestry.  That makes him, among other things, the first person to have chaired both the House (1995-97) and Senate Agriculture Committees.  He was not the first person to raise the issue of geographical indications - the EUs controversial system for granting exclusive rights to the names of certain foods to producers in specified locations - at the trade hearing on January 27.  Committee Chairman Orrin Hatch (R-UT) did that in his opening statement.  In discussing the Transatlantic Trade and Investment Partnership, Senator Hatch said that the T-TIP agreement "must effectively address the systematic misuse of geographical indications to create market barriers."

Senator Roberts was, however, the committee member who most effectively raised the issue with Ambassador Froman.  There was more to his question than the telling offhand remark that is today's featured quote, but not much. There didn't need to be.   The issue was familiar ground to all concerned. 

Last April, for example, 45 senators sent a letter to Ambassador Froman and Secretary of Agriculture Tom Vilsack, setting out a series of concerns about GIs.  "In country after country," they wrote, "the EU has been using its FTAs to persuade trading partners to impose barriers to U.S. exports under the guise of protecting GIs."  The senators went on to cite the example of a recent EU agreement with Central America, which includes new restrictions on the use of the term "bologna" for exports of that meat from the United States.

The issue is not restricted to Central America.  It is global.  Another place where the EU made significant progress in its worldwide campaign for recognition of its system of GIs was in its partnership agreement with the South African Development Community.   In a letter last August to South Africa's ambassador to the United States, Ambassador Ebrahim Rasool, the Executive Director of the Consortium for Common Food names, Jaime Castaneda, wrote:

"As a result of [the new partnership agreement], many cheeses sold in the South African market may now only originate in the EU.  We recognize that some of these products legitimately warrant GI protection, but many others do not.  These are products, such as feta, asiago, fontina, gorgonzola and others - that have been produced in the United States and globally for many decades and are widely accepted as generic."

A Bicameral Issue.  We should point out that concern about GIs - and the EU's success in that area - is not exclusively a Senate concern.  When Ambassador Froman got to the House side for his January 27 testimony before Ways and Means, Chairman Ryan (R-WI) showed him some Wisconsin Gouda to help underscore Wisconsin's ire over GIs.  With the cheese in his hand, Chairman Ryan said:

"This is my favorite cheese [holding it up.]  It's Wisconsin Gouda, smoked Gouda made in Monroe, Wisconsin, and smoked at Swiss Family Smokehouse in Evansville, Wisconsin.  For generations, we've been making Gouda in Wisconsin.  And for generations to come, we're going to keep making Gouda in Wisconsin.  And feta, and cheddar, and everything else.  So, it is extremely important that we do not allow these countries we're entering into trade agreements [with] to use these kinds of improper barriers to block U.S. dairy exports."

Ambassador Froman's responses to the questions he got in the House and Senate on GIs were essentially the same. We found his response to Senator Roberts, however, especially cogent.  Here is some of that:

"This is one of the toughest outstanding issues still in TPP, because we and the EU have diametrically opposed positions.  Our view is that our system works well for Europe.  There are 18 trademarks for Parmesan Reggiano in the U.S.  And Europe sells hundreds of millions of dollars of cheese in the United States, and we don't sell any in Europe.  And so we have been out there fighting hard to make clear that we can have a system where countries can take into account common names and trademarks before they grant any geographical indications.  And that's the only way to balance perspectives of the United States and the European Union. 

"Our challenge is our trading partners are negotiating with us, but they also want to negotiate and want to have good relations with the European Union.  And so they're stuck in the middle, and we're trying to find a middle path that will protect our trademarks and those common names."

COMMENT
We think Ambassador Froman did a masterful job in framing the issue, particularly his emphasis on the dilemma that faces those countries that need to maintain strong economic and trade ties with both the United States and the European Union.   Whether the solution he suggests will be enough for the U.S. industry is less clear, but that is a problem for later.  America's immediate challenge is to get an agreement done.  Her problem - one of them, anyway - is that the EU has been racking up completed agreements, and the U.S. has not.

That is one problem.  Another is that the U.S. is caught in the vice of varying venues.  T-TIP, the Transatlantic Trade and Investment Partnership, seems to be the place where the U.S. can directly confront the EU on GIs.  Given the pace and the political difficulty facing those negotiations, however, the U.S. could well and truly have lost the battle over GIs long before there is a meaningful discussion of them in T-TIP.

As for TPP, the Trans-Pacific Partnership, it would seem an awkward venue for discussions about GIs, awkward but not impossible and not unreasonable. It is awkward because the U.S. would be, or rather, is - we assume this is happening - inserting itself into agreements to which it is not a party. However awkward that may be, it is certainly not unreasonable for the U.S. or any country to insist that its interests be protected when trading partners negotiate with others, namely the EU.

The hearings we've been focusing on were both in large measure about Trade Promotion Authority.   While much of the trade talk that swirls around us has to do with the interplay between TPA and TPP, in fact the Trade Promotion Authority bill, when it comes, will deal with all of the pending negotiations - TPP, T-TIP, TISA, etc.  We assume there will also be some general language on U.S. trade objectives, one of which might reasonably be ensuring the integrity of existing agreements.  In some systems there are words for this kind of problem.  The GATT phrase "nullification or impairment" comes to mind.

We are not sure what form of words the drafters of the next TPA bill should use to address the GI issue and its inevitable successors.  We know they'll come up with something.

***

Finally, as readers of these pages will have surmised, we think Wikipedia does a pretty good job.  In any case, they managed the necessary diplomacy in their entry on Gouda cheese, which begins as follows:


"Gouda is a Dutch yellow cheese made from cow's milk.  It is named after the city of Gouda in the Netherlands.  One of the most common cheeses worldwide, the name is used today for a variety of similar cheeses produced in the traditional Dutch manner as well as the Dutch original." 

 

SOURCES & LINKS

A Finance Committee hearing is a link to the video recording of the Committee's January 27 hearing on the President's trade agenda.  That recording was the source for today's quote.


A Letter from the Senate is a link to the letter that 45 senators sent on April 4, 2014, to the U.S. Trade Representative and the Secretary of Agriculture, expressing their concerns over the EU's success in limiting the ability of U.S. exporters to use certain product names.


A Ways and Means Committee hearing is a link to the video recording of that committee's trade hearing on January 27.  This was the source of Chairman Ryan's comments about Gouda and GIs.


To South Africa's Ambassador is the text of the August 14 letter to Ambassador Rasool from the Consortium for Common Food Names.


Gouda, The Wikipedia Entry is just that 

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