Americans love cheddar cheese.

Cheddar came out on top of a poll run on National Cheese Day in June this year (yes, it’s a thing). A simple, yellow square of cheddar is the go-to for cheeseburgers. Melted cheddar smothering pasta creates the basic, yet oh-so-popular, dish of macaroni and cheese. Friendly cheddars are holding their own against fancier cheeses on the American charcuterie board.

Despite cheddar’s ubiquity – or perhaps because of it – few Americans would associate cheddar cheese with its ancestral home: Cheddar, in Somerset County, Britain.

When the residents of the small English village created the cheese centuries ago, they couldn’t have imagined their style of cheese would eventually be replicated by thousands of manufacturers across the globe. In the process, the moniker Cheddar, originally designating a unique geographic location, evolved into a generic description. And therein lies the heart of the modern trade dispute over “geographical indications,” or GIs for short.

What’s in a name?

Perhaps conscious of cheddar’s history, today the European Union (EU) actively seeks to restrict the use of some cheese names that are tied to a specific European locale. The ship may have sailed on cheddar, but the EU argues that many commonly-used cheese names should be reserved for products manufactured in their unique place of origin. To give the position legal backing in international markets, many EU trade agreements include GI protections that limit the ability of manufacturers outside the specific geographical region from using the name in commerce.

Recently, EU trade negotiators extended their preferred GI protections to America’s doorstep. Trade agreements with Canada and Mexico, two of the largest export markets for U.S. cheese, include GI protections for popular cheeses like asiago, gorgonzola, and feta. If the agreements are implemented, American producers will have to modify the product labels of certain cheeses sold in the Canadian and Mexican markets. Instead of simply calling a product “feta cheese” (which the EU argues only comes from a specific region of Greece), American cheesemakers will have to transition to terms like “feta-style cheese.”

Grater Challenges for American Producers

To the EU, solidifying GI protections for a growing list of products makes perfect sense. The EU claims that the policy defends the hard-earned reputation of local brands and delivers increased returns to European producers, many of whom live in impoverished rural areas. GI protections are highlighted as a key benefit of the trade agreement with Canada, on the grounds that it will help “Europe’s rural communities market distinctive food and drinks.”

American producers understandably view it differently. Many have built successful businesses selling their own version of the cheeses to domestic and international customers. The GI protections agreed to by foreign governments are forcing them to change how they label and market their products, with serious economic implications.

Consider the case of Mexico, the number one U.S. cheese export market. Last year, U.S. exporters sold nearly $400 million worth of product to Mexican consumers. Sales by EU member countries paled in comparison, amounting to just $64 million. Still, the EU made impressive strides over the last ten years, growing cheese exports to Mexico almost 250 percent. If U.S. producers are forced to stop using their preferred product names, who knows how much market share EU producers could chip away.

Poking holes in the EU Strategy

EU efforts to restrict GIs have not gone unnoticed by the U.S. government. During recent negotiations for the U.S.-Mexico-Canada Agreement (USMCA), the United States secured new procedures related to GI protections (Chapter 20). The deal even lays out terms for seeking cancellation of a GI protection, a feature that could help the United States fight future GIs that negatively impact U.S. businesses.

The Consortium for Common Food Names, an international advocacy group led by Jaime Castaneda of the U.S. Dairy Export Council, praised the USCMA as a “sea change in GI policy.” But under the terms of the agreement, the new standards will not apply to GI protections already agreed to by Mexico and Canada. That means U.S. cheesemakers may be forced to comply with at least some labeling and marketing requirements found in the EU trade agreements.

However, if U.S. officials are serious about using USMCA as a template for other trade agreements, the U.S. response to GI protections could be going global soon.