By Sarah Morland and Emily Green
MEXICO CITY, Aug 28 (Reuters) - What's in a cheese name?
That question has become a sticking point in U.S.-Mexico trade talks, according to two Mexican government sources who spoke on condition of anonymity because, no matter how you slice it, cheese diplomacy can be delicate.
The U.S. is objecting to Mexico's new trade deal with the European Union, which extends special protections to hundreds of European products whose names are tied to specific regions, such as Parmigiano
Reggiano, feta and manchego. It also gives the European Union legal recourse against violations.
Washington argues that the deal, signed in May, would restrict future U.S. producers from selling cheeses in Mexico under names such as parmesan and feta. The U.S. has long maintained those names are generic, while the EU says parmesan should be reserved for Parmigiano Reggiano from northern Italy and feta cheese from select parts of Greece.
"It's absolutely wrong what Mexico did," said Jaime Castaneda, executive vice president of the U.S. Dairy Export Council. "The Mexican government has to make it absolutely certain that the United States and the Mexican manufacturers of common cheese names will continue to be able to be in the market."
The U.S. and Mexico are in the midst of thorny bilateral talks to secure an interim trade deal this year, while parallel discussions are ongoing to renew the U.S.-Mexico-Canada Agreement, a linchpin of Mexico's economy.
Those high-stakes negotiations have given the U.S. leverage to push its case for what has become a billion-dollar market for U.S. cheese exporters. And it is causing a headache for Mexican authorities.
Although the Mexico-EU treaty has been signed, Mexico has yet to complete the procedures needed for the pact to take effect, while the European Union has, according to a European Commission spokesperson. A spokesperson for Mexico's economy ministry said the agreement needs to be ratified by lawmakers.
The European Commission told Reuters it would not be possible to change the agreement's terms and that it had "taken note of the U.S. actions" opposing the protections for European cheeses.
Mexico's economy ministry and the Office of the U.S. Trade Representative did not respond to requests for comment, though the U.S. agency has previously stated its views on the EU's Geographical Indication (GI) product protection scheme.
"The EU continues to seek to expand its harmful GI system within its territory and beyond," the trade office said in an April report.
It said that forcing dairy producers outside the bloc to use descriptors such as "imitation feta" or "asiago-style" was costly and unnecessary and contributes to the $1.2 billion U.S. cheese trade deficit with the bloc.
MEXICO'S CHEESY LOVE AFFAIR
Mexico is among the world's top consumers of cheese, favoring domestic varieties such as stringy Oaxaca cheese, often melted on quesadillas, and queso fresco, ideal for crumbly breakfast toppings.
But cheese imports, mainly from the U.S., have surged since the 1980s and now make up nearly 30% of domestic consumption, driven by products like Kraft's Grated Parmesan and Walmart's Great Value Manchego, as well as the growing popularity of pizzerias in Mexico.
The U.S. exports about $1 billion worth of cheese to Mexico annually, while the EU's total dairy exports to the country only amount to $200 million.
European cheese producers said the clash with the U.S. reflects opposing agricultural cultures — mass production versus protected regional traditions.
"The U.S. has always been a nation of high-volume consumption, which is precisely the opposite of what designations of origin represent," said Antonio Martinez, head of a organization that protects manchego's regional designation. The smaller scale of manchego producers in Spain gives them their "charm and unique identity," he added.
Cheese sellers in Mexico like Rodolfo Navarro, who heads a family-owned cheese distributor, support the trade deal with the EU because it would lower tariffs on European-imported cheeses.
"These cheeses will serve different markets. European cheese will be sold in a higher niche," he said.
Navarro's gripe is with U.S. producers, whom he and other Mexican cheesemakers accuse of undercutting local production.
The Institute for Agriculture and Trade Policy warned in 2023 that Mexican dairy producers were vulnerable to cheap U.S. exports.
U.S. cheese has a reputation for poor quality, exacerbated by the continuing popularity of the processed slices known as American cheese – made of emulsified salts and dairy leftovers, and technically not a cheese at all – as well as canned, sprayable cheese.
U.S. producers say their cheeses have beaten European rivals in international competitions, while fans of the processed cheese value their long shelf life, versatility and low cost.
"The U.S. is flooding the Mexican market with its cheeses because they can sell them very cheap," said Georgina Yescas Trujano, co-founder of Mexica cheesemonger Lactography.
"I'm glad tariffs on European cheese are being lowered, because Mexicans can learn to eat better cheese."
(Reporting by Sarah Morland and Emily Green, Editing by Rosalba O'Brien)
