November 5, 2019 9:46AM

Losing Ground to the EU on Trade with China

Politico reports the following on a new EU-China trade agreement:

Beijing and Brussels have struck a deal to protect regional food names such as Gorgonzola, Champagne, Nanjing salted duck and Lapsang Souchong tea.

The agreement protects a list of 100 European regional food specialties in China and 100 Chinese delicacies in the EU.

...

The deal is set to anger U.S. agriculture producers who say the EU is boxing them out of their main growing markets, as its system of geographical indications builds an increasingly strong foothold worldwide.

Indeed, the agreement means that a cheese, for example, can only be labeled and sold as "Roquefort" in China if it was made in the French commune of Roquefort-sur-Soulzon. American blue cheese producers will have to find a different — lesser-known — name for their product.

...

People following the accord said that the EU's goal is to expand the list to another 175 geographical indications, four years after entry into force of this agreement.

Let me note a couple things here. First, I have a great deal of skepticism about geographical indications. To me, they mostly seem like a way to protect your products from competition. When the EU promotes these principles in trade deals, it spreads this protectionist idea to other countries. My former colleague Bill Watson wrote about these issues here.

Second, the U.S. government should actively push back against these EU policies. In general, the United States has done so, although I have not heard anything about this issue in relation to the U.S.-China talks of the past couple years. It should be a focus of U.S. trade talks, and if the Trump administration is ignoring it, they are making a big mistake.

Finally, I will also point out that the EU was able to achieve this result without threatening China with tariffs. Perhaps there is a lesson there.