While the world watches on as the Brexit freight train heads towards derailment, there has been little focus in the Australian media about the ongoing negotiations for a Free Trade Agreement with the European Union.
One of the key sticking points in those negotiations is the issue of geographical indications. This peculiarly European trade barrier limits the labelling of some foods so that only producers from certain regions can use the name. The most well known example of geographical indication is champagne which can only be applied to certain sparkling wines produced in the Champagne region of France. Elsewhere, including in Australia, the equivalent beverage goes by the spectacularly unevocative “sparkling wine”.
France is home to some of Europe’s most prestigious champagne regions. Credit: Champagne-Booking.
Successive Australian governments have lobbied against geographic indication regimes at the World Trade Organisation and in other trade fora due to their trade protectionist nature. By contrast with Europe, Australia has for decades held a staunchly open market view of global trade and has fought hard to remove both tariff and non-tariff barriers to trade.
However, as Australian and European FTA negotiators proceed, it has become apparent that for the Europeans these geographic indications could well be a deal breaker. This could have a significant impact on Australian dairy producers and manufacturers. Examples of Australian produced dairy products which might be affected include fetta, parmesan and gouda cheeses. This is alongside non-dairy products such as prosecco sparkling wine.
‘Why Geographical Indications? Asks @oriGInNetwork’s Managing Director Massimo Vittori. Because it’s a source of jobs and revenue for local communities,’ opening the @EUinAus seminar in Lobethal in the #Adelaide Hills.🍷🍇🧀 https://t.co/HO8QqJD3PM
#EUTrade @UniofAdelaide 🇪🇺🇦🇺 pic.twitter.com/GGJFvnwny9
— EU in Australia (@EUinAus) September 12, 2019
The European Union has suggested that expanding the list of geographic indications would actually be beneficial for Australian producers and have downplayed the extent to which the list will be expanded. It is understood, however, that there will be no free trade agreement if Australia does not relent on this trade barrier.
Australian governments and exporters have relentlessly worked to open up trade to new markets in a way which has helped to mitigate the effects of distance to market as well as addressing the impact of our volatile climatic conditions. While Europe has chosen to continue to increase the level of trade protection and subsidisation of its highly inefficient agricultural sector, Australia has unashamedly driven the free trade agenda globally and our economy has benefited accordingly.
Agriculture is one of Europe’s most inefficient sectors. Credit: Belga/AFP.
Importantly, for dairy producers and manufacturers, it is not necessarily the trade of dairy products to Europe that is affected, it is trade to our neighbours in Asia and the Middle East, for example. If Europe is successful in expanding the list of products which can only be named for European locations, it will give inefficient European producers a boost on those markets and even here in Australia. Which discerning epicure, for example, is likely to choose “Australian salty unaged white salad cheese” over “Genuine Greek Feta”?
Make no mistake. Geographic indications are an unhealthy, protectionist limit to free trade and have no place in a healthy global market.