-------- Forwarded Message --------
Subject: [Pen-l] the pricing of names and comparative advantage
Date: Sun, 05 Oct 2014 11:40:00 -0700
From: Eubulides <[email protected]>
Reply-To: Progressive Economics <[email protected]>
To: Progressive Economics Network <[email protected]>
http://www.latimes.com/nation/la-na-wine-cheese-fight-20141005-story.html
Stew over European food names complicates trade talks - LA Times
By EVAN HALPER, DON LEE
October 4, 2014
As Europe and the United States pursue a lofty vision of a free trade
pact that removes tariffs and eases regulatory burdens, it's not just
disputes over automobile safety and digital privacy that are creating
tensions.
It is wine and cheese. And the sausage that goes with it.
European leaders say they can't allow cheese produced outside Italy to
be passed off as Parmesan. Feta? That's only from Greece. If a wine
label says Chateau, they say, it must be fermented in France.
And don't get them started on California Chablis, the white wine named
for a village in the Burgundy region of France.
The aggressive campaign to protect European-designated product names
with origins on the continent is gaining traction as countries in Asia
and Latin America agree to the terms.
The intellectual property battle has caused near panic in the U.S.
agriculture industry and is complicating prospects for a transatlantic
trade agreement involving half the world's economy.
When U.S. trade negotiators met with their European counterparts last
week at a conference center in a Washington suburb, the food fight was
on the agenda. It will stay there when the talks resume in Europe later
this year.
The negotiations are behind closed doors, but in public, the Obama
administration is showing no sign of yielding to the European demands.
"In this area, we have long-standing differences with the EU," said
Trevor Kincaid, a spokesman for the office of the U.S. Trade Representative.
The Obama administration is walking a tightrope, however, defending the
rights of American companies to use what they consider generic European
food names but avoiding heated rhetoric around the issue, which could
upset the broader trade negotiations.
But pressure is growing from American food companies big and small.
Giant California vineyards don't want more countries to go the way of
Canada, which has banned non-French companies from selling products
labeled Champagne. California vineyards were forced to change their
Canada-bound bubbly labels to "sparkling wine."
Artisan cheese makers in Wisconsin fear huge losses if they are banned
overseas from selling American-made feta, Parmesan, Asiago, Havarti and
other cheeses with European names.
Europeans say they are only protecting their heritage — and their
wallets — from foreign imitations.
"If you make a cheese from Wisconsin, good, you can call it cheese of
Wisconsin," said Elio De Tullio, a trademark attorney in Rome who
represents numerous cheese producers in Italy. "But why do you call it
Parma, or Taleggio or Provolone? It's not fair. Because you are trying
to grab the reputation of the other. You should pay royalty."
The idea that Parmesan could only come from northern Italy is
bewildering to the folks at Sartori Cheese in Plymouth, Wis., the
self-named cheese capital of the world.
The founder, an Italian immigrant named Paolo Sartori, started making
top-shelf hard cheeses 75 years ago after supposedly studying techniques
from an Italian count he met while crossing the Atlantic.
In 2011, the Wisconsin company won top honors for best Parmesan at the
highly respected Global Cheese Awards in Britain. The winning cheese,
with its "subtle fruity note and finishes with a caramelized Parmesan
flavor that blossoms on the palate," beat out the many Italian contenders.
Italian cheese makers squawked. And the next year, the Parmesan category
was eliminated, replaced with a category for Parmigiano Reggiano, which
can only legally come from certain regions in Italy.
"The Europeans are scared because there are a lot of U.S. companies that
are making great cheese," said Jeff Schwager, president of Sartori Cheese.
The Wisconsin Legislature declared the European labeling campaign
abusive and passed a unanimous resolution in April calling on the Obama
administration to fight back.
Greek yogurt and even bologna, that staple of school lunch boxes, are
also under siege.
Chobani, based in upstate New York and America's largest producer of
Greek yogurt, was ordered to stop selling its product in Britain after a
competitor complained in court that it was not made in Greece.
Dozens of U.S. senators rushed to defend American-made bologna earlier
this year, calling on the Obama administration to challenge agreements
in Latin American countries that could prohibit its sale there under
that specific label.
The administration can do little more than raise objections. For now,
the sausage clauses still stand in Latin America.
Europeans are also starting to explore agreements that reach beyond food
and into textiles, which could include placing protections on products
like Argyle socks.
At the core of the European push is economics, with pressure to appease
powerful farm lobbies across the continent when cash-strapped
governments are cutting agricultural subsidies and struggling with a
debt crisis.
But European identity and culture are also at play. Local wines, cheeses
and other items carry heavy emotional baggage.
"What they're arguing is, 'Look, this is a classic example of big
international U.S. agribusiness trampling traditional food suppliers
under their big Yankee boots,'" said Jacob Kirkegaard, a senior fellow
at the nonpartisan Peterson Institute for International Economics in
Washington.
He called the effort to protect product names a hot-button political
issue in much of Europe, like gun control in the United States.
"It's an argument that in these local communities has significant
political weight," he said.
Some American firms sympathize.
A coalition of high-end vintners in Napa, which has been working to
protect the Napa Valley wine label from counterfeit and other misuse in
China and elsewhere, says the U.S. effort to protect American use of
European wine names is wrong.
"If we would like the respect of our name, we think others should have
it as well," said Hailey Trefethen, a vintner at her family's vineyard
here at the foot of the Napa Valley. The estate is a designated historic
landmark where winemaking began 130 years ago, and the stately cellar is
made with giant old-growth redwood beams.
"Some of the best sparkling wine made in the U.S. is coming out of
Napa," she said. "None of them use the name Champagne. They could,
legally. But they don't."
Trefethen's opinion is hardly prevailing among California winemakers,
who sell millions of bottles labeled Champagne each year.
The Wine Institute, which advocates for more than 1,000 wineries in
California, chafes at the notion that California vineyards could easily
give up names on labels that their brands have been wrapped in for decades.
"It is easy to say it is not onerous for someone else to do something,"
said Tom LaFaille, international trade counsel at the San
Francisco-based group. "It takes years to change a brand."
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