Why Cheese Is Essential to Ag Trade Growth

April 11, 2014 05:59 AM
Why Cheese Is Essential to Ag Trade Growth

Cheese could play a vital role in ongoing trade negotiations. 
By: Melissa George Kessler, American Farm Bureau Federation

Gorgonzola, asiago, parmesan, feta – all of these are common in grocery stores and restaurants, key components of salads, pasta dishes and cheesy bread products.

They are also known as geographical indicators, words that reference the historical origins of the products themselves, though all have been produced outside of those home regions for generations. In many cases, makers of these products in other parts of the world have spent decades building their markets.

But now the European Union is seeking restrictions on how these common names can be used as part of a trade agreement it is negotiating with the United States.

If EU negotiators get their way, American producers of these cheeses and other food products would be forced to rebrand their goods and try to communicate to consumers why the foods they have traditionally enjoyed are suddenly called something different. This would have real reputational and financial costs; the U.S. Dairy Export Council estimates $4.2 billion worth cheese would be affected.

It’s no news that U.S. agriculture is a trade powerhouse. The value of U.S. ag exports has exceeded $140 billion each of the past two years, with an overall positive trade balance that infuses billions of dollars into the American economy each month.

According to the United States Trade Representative (USTR), the agency that negotiates trade agreements on behalf of the U.S. government, 20 percent of farm income is from exports. This means that not only is ag trade essential to the continued health of our national economy, growing sales of farm products overseas will fuel the growth of rural economies here at home.

Two very important trade negotiations are underway right now: talks with the EU known as the Trans Atlantic Trade and Investment Partnership , and a separate set of negotiations with other Pacific Rim countries, known as the Trans-Pacific Partnership. Each of these agreements has the potential to vastly broaden markets for the goods produced by American farmers, ranchers and food companies.

But to do so, negotiators must reach agreements that truly work for farmers, a goal that the cheese debate shows is more complex and delicate that it might appear on the surface.

Misuse of geographical indicators is a perfect example of protectionism, and it’s a trade barrier that simply must not be codified in any TTIP agreement meant to benefit American agriculture. Luckily, lawmakers overseeing the trade talks are having none of it. More than half of the U.S. Senate wrote negotiators last month and asserted they will reject any proposal that restricts these common names for cheeses.

Unlike many industries in our increasingly service-based economy, agriculture results in tangible products - commodities, foodstuffs, fibers and fuels. American farmers and ranchers produce the best food in the world, and selling it to the 95 percent of people who live outside our borders is enormously beneficial for both sellers and buyers.

But to be beneficial to agriculture, TTIP and TPP must address potential trade barriers like geographic indicators, sanitary and phytosanitary issues and even standards for genetically modified crops in ways that are productive and take into account the diversity of our agriculture industries and our consumers.

When ag trade works, the value to U.S. producers and their customers is enormous. But if these critical issues aren’t addressed, an agreement could be just stinky cheese.

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