From cheddar to trade barriers: Cheese complicates US-Mexico trade talks, Pg2

Key Highlights:

• The United States is objecting to Mexico's new trade deal with the European Union, which grants special protections to hundreds of European products under Geographical Indications (GIs).
• The US argues that this deal would restrict its producers from selling cheeses in Mexico under common names like parmesan and feta.
• Mexico is a crucial market for US cheese exporters, accounting for approximately $1 billion in annual exports.
• The dispute is complicating ongoing bilateral trade talks between the US and Mexico, as well as discussions to renew the US-Mexico-Canada Agreement (USMCA).
• The EU-Mexico trade deal was signed in May 2026, but Mexico's ratification is still pending.

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Detailed Insights:

• The EU-Mexico trade deal, known as the Modernised Global Agreement and Interim Trade Agreement, aims to eliminate tariffs on 99% of traded goods and provides legal protection in Mexico for 568 European GIs.
• The US maintains that names such as "parmesan" and "feta" are generic terms that should be available for use by all producers.
• Conversely, the EU asserts that these names are intrinsically linked to specific regions of origin, such as Parmigiano Reggiano from northern Italy and feta from Greece.
• The US Trade Representative has previously criticized the EU's GI system, arguing it creates non-tariff trade barriers and forces non-EU producers to use less appealing descriptors like "imitation feta".
• The significant volume of US cheese exports to Mexico, compared to the EU's dairy exports to Mexico (around $200 million), underscores the commercial stakes for the US.
• The ongoing negotiations for an interim trade deal and the renewal of the USMCA provide the US with leverage to press its concerns regarding the cheese naming dispute.
• The USMCA, which replaced the North American Free Trade Agreement (NAFTA) on July 1, 2020, is a cornerstone of Mexico's economy and aims to liberalize trade among the three North American nations.

Key Concepts Involved:

• Geographical Indication (GI): An intellectual property right that identifies a product as originating from a specific geographical region, where its quality, reputation, or other characteristics are essentially attributable to that location.
• US-Mexico-Canada Agreement (USMCA): A free trade agreement between the United States, Mexico, and Canada, which came into force on July 1, 2020, replacing the North American Free Trade Agreement (NAFTA).
• Trade Barriers: Government-imposed restrictions on international trade, which can include tariffs, quotas, or non-tariff barriers like specific labeling requirements or intellectual property protections such as GIs.