The effects on the updated US-Chile FTA on EU cheese producers

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Chile is the largest cheese market in South America for the US, accounting for than half of all US dairy exports according to International Dairy Foods Association (IDFA) data.

Recently, US trade representatives re-negotiated the terms of a free trade agreement (FTA) with Chile to address what some in America described as ‘unfair treatment’ of US speciality meat and dairy exporters.

Specifically, the US-Chile agreement aimed to enable US cheese and meat exporters to continue to market their products in Chile using common terms, such as ‘parmesan’ or ‘prosciutto’.

This was done to counter provisions in Chile’s separate agreement with the European Union that protects EU products with geographical indications (GIs) – i.e., those that originate from specific regions in Europe, such as Comté or Gruyére cheeses – and makes it illegal to sell imitations. Under the EU-Chile agreement, no one is allowed to call cheese ‘Comté’ unless it’s made in the French region of Franche-Comté under specific production conditions.

The USDA Foreign Agricultural Service said in a report that this was one of the first times that an EU trade agreement included such broad protections for commonly-used names; and that the deal could elevate consumer prices, restrict competition and limit imports. In other markets such as Canada, Japan, and Singapore, the EU has specified that the term Parmigiano Reggiano is protected, for example, but non-EU manufacturers are still allowed to use of the common name 'parmesan' to market their products.

The EU is the third largest cheese exporter to Chile, after Argentina and the US.

During the summer, US trade representatives – including the organizations Consortium for Common Food Names (CCFN), National Milk Producers Federation (NMPF) and US Dairy Export Council (USDEC) – worked on an agreement with the Chilean authorities to allow US meat and dairy exporters to use common names to market their own products.

Included in the agreement is a mutual understanding regarding 'prior users' of certain cheese and meat terms in the market.

For a limited number of products that the EU has allowed to be ‘grandfathered’ and that American exporters had exported to Chile prior to the updated EU-Chile FTA, all US producers of those products would continue to use those terms in Chile.

In addition, a list of common names will also be protected for use in Chile for all US producers.

Under the World Trade Organization’s TRIPS Agreement, specific provisions on products of geographical indications are binding on all WTO members – but the framework is broad and in some jurisdiction, such as the US, terms such as ‘feta’ or ‘parmesan’ are considered generic. Grandfathering provisions allow producers who had produced certain foods and beverages prior to the enforcement of a relevant trade agreement to continue to use common name descriptors.

Which cheeses would US exporters be able to market in Chile? As many as 29 cheese types – from edam to tomme – would be marketable under the new US-Chile-agreement. These are:

• american

• blue

• blue vein

• brie

• burrata

• camembert

• cheddar

• chevre

• colby

• cottage cheese

• coulommiers

• cream cheese

• danbo

• edam

• emmental

• emmentaler

• gouda

• limburger

• mascarpone

• monterey/monterey jack

• mozzarella

• pecorino

• pepper jack

• provolone

• ricotta

• saint-paulin

• samso

• tilsiter

• tomme

“CCFN applauds the Administration for their initiative to negotiate the protection of parmesan and a number of other key products,” said Jaime Castaneda, executive director for CCFN. “We greatly appreciate USTR and USDA’s work with the Chilean government and urge the Administration to continue its efforts to push back against the European Union’s strategic monopolization of common names. To that end, it’s vital that the U.S. establish a firm policy of proactively seeking protections for common name products with key trading partners all around the world.”

“Chile is a critical market and partner for U.S. dairy in Latin America,” said Krysta Harden, president and CEO of USDEC. “We greatly appreciate USTR and USDA for their hard work to strengthen this relationship, which will directly help US producers grow their businesses in Chile. We look forward to continuing to work together to create new avenues for US dairy exports and to avoid similar challenges from cropping up in other international markets.”

“This agreement is a milestone for U.S. dairy producers,” said Gregg Doud, president and CEO of NMPF. “It ensures that many of our products will maintain fair access to the Chilean market, supporting the growth and success of American dairy farmers on a global scale. Now, we need to build on that momentum by securing agreements with other trading partners to protect export opportunities for even more US cheeses.”

EDA plays down deal's impact The European Dairy Association (EDA) has dismissed the risk to EU cheese producers from competition arising as a result of the deal between the US and Chile. Alexander Anton, EDA secretary general, told DairyReporter: "We very much welcome the Chile-EU FTA, that is waiting for ratification by Chile as we speak, and also its chapter on the protection of Geographical Indications from both sides.

"It does not come as a surprise that the US continue their approach under the headline ‘common names’. This said, cheese aficionados in Chile and around the globe do know that Parmesan is an iconic Italian cheese with a unique quality and taste – ‘non si fabbrica, si fa’ as we say.”

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The effects on the updated US-Chile FTA on EU cheese producers

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