A congressional checkup this week on the U.S.-Korea Free Trade Agreement implemented two years ago was mostly positive, reflecting growing sales of U.S. dairy products in South Korea. But an industry official warned of a growing problem with the European Union over cheese.
The trade agreement eliminated nearly all Korean tariffs on U.S. dairy exports, but a new and growing non-tariff barrier is restricting access to the Korean market for U.S. cheeses, said Shawna Morris, vice president of trade policy for U.S. Dairy Export Council and National Milk.
Morris testified before the Senate Finance Committee’s trade subcommittee on Tuesday, July 29.
Those restrictions are on cheeses with common food names and are a direct result of South Korea’s trade agreement with the EU after U.S. and South Korea negotiations had closed, she said on Wednesday.
That trade agreement restricts U.S. access to the Korean market for gorgonzola, feta, asiago and fontina cheeses, she said.
Overall, U.S. trade with South Korea has been going well, sales are up and better access to markets is phasing in, she said.
U.S. dairy sales to South Korea in 2011, before the U.S.-Korea agreement was implemented, were $222 million. Those rose to $300 million in 2013, and more growth is anticipated, she said.
Despite the benefits, the country’s trade pact with the EU requires its imports of cheeses — with names that have become generic worldwide — come exclusively from the EU. USDEC and National Milk want Congress to take stock of non-tariff issues, and this is certainly one of the biggest, Morris said.
The issue is not limited to Korea. Since its trade agreement with Korea, the EU has replicated the restrictions, claiming the names are geographic indicators, in country after country, she said.
“It’s a rapidly growing problem,” she said.
The EU is trying to stomp out competition for cheeses and other foods in the future through trade agreements, she said.
“In a nutshell, the European Union has been leaning on countries around the world to block imports of products by confiscating common food names and reserving them exclusively for cheese producers in their member countries,” she testified.
The EU has placed similar restrictions in Central America, Peru, Colombia and South Africa. Canada has also agreed to restrict cheese names, and the EU is pursuing similar objectives in Singapore, Japan, the Philippines, Malaysia, Vietnam and China, she said.
“We are urging Congress to address EU attacks on common names on the broadest sense,” she said on Wednesday.
In addition, it is clear that the EU wants to impose cheese name restrictions on the U.S. through the planned Trans-Atlantic trade agreement, and that is “entirely unacceptable,” she said.
The U.S. dairy industry, along with other food industries, wants already imposed EU restrictions regarding geographic indicators rolled back. Any agreement between the U.S. and the EU should address those trade barriers to U.S. exports in third-country markets and restore access to EU markets for key U.S. exports, such as parmesan and feta cheeses, she said.