On Friday, Canada and the European Union (EU) concluded FTA negotiations. The U.S. Dairy Export Council (USDEC) believes the outcome of the Canada-EU FTA (CETA) is important, given ongoing U.S. FTA negotiations with Canada and separately with the EU. Details on the CETA outcomes are relatively limited at this stage, which is not unusual. Typically, specifics of an FTA only become available once the text of the agreement is released several months after its conclusion. However, given CETA's relevance to ongoing U.S. negotiations with both partners, we wanted to share with members available information that we have at this time.

Dairy Market Access

Canada will create a new tariff-rate quota (TRQ) of 17,000 metric tons for "high-quality" European cheese as well as a TRQ of 1,700 metric tons for industrial cheese. The term "high-quality" is not defined in public materials available at this stage so it is unknown whether this access would be limited to specific cheese tariff lines. Canadian tariffs on the vast majority of dairy products are not eliminated under the agreement.

Although this is the first time that Canada has provided market access for traditional dairy products in an FTA, it is important to note that the access granted is relatively limited and aside from the limited quantity in the new cheese TRQs, dairy tariffs are not eliminated over time. USDEC would not view a similar outcome as acceptable in the U.S.-Canada negotiations under TPP.

Geographical Indications (GIs)

If press reports are accurate, the outcome on GIs is extremely concerning. Canada has agreed to protect a list of approximately 150 accepted GIs, including several cheese GIs. New restrictions have been put in place with five cheese names that have long been generic in the Canadian market: feta, gorgonzola, asiago, fontina and muenster. (Reportedly, no restrictions have been placed on the use of the term "parmesan", another highly-contested term in GI discussions.)

The new restrictions specify that companies currently selling those five cheeses in Canada will continue to do so but will have to clearly display the country of origin on their label and will be prohibited from using certain images that could "evoke" the GI country. For instance, those selling feta would be forbidden from displaying the Greek flag, alphabet or other symbols that may call Greece to mind on their labels. It is not clear whether the FTA will define current users as those using a term as of the agreement signing date or an earlier time such as the launch of CETA talks.

Any company not covered by the grandfathering provisions would not be permitted to use the cheese name directly. Those companies would instead have to label the product as "Muenster-like" or "Gorgonzola-style", as well as comply with the two provisions listed above.

Again, if press reports regarding CETA's GI outcomes are accurate, the results are deeply disturbing for many reasons. One of the chief concerns is that the agreement appears to have permitted the negotiation of additional restrictions on generic terms that should rightfully be able to be used by anyone in Canada. Moreover, the agreement has done nothing to remove the EU barriers so that even Canadian companies permitted to continue to label their product as "Feta" appear unable to sell that product, if accurately labeled, in the EU market.

Using an FTA to impose new barriers to trade and competition-as the EU appears to have succeeded in doing with respect to the use of several cheese names-certainly reverses the traditional goals of trade agreements. Such an outcome would be entirely rejected by USDEC as doing nothing to address the true root of trade problems related to GIs and that is the EU's efforts to restrict the use of common product names all around the world.

On both dairy market access and geographical indications areas USDEC will continue to keep members informed as more information becomes available. Any questions can be directed to Shawna Morris (smorris@usdec.org).