Mexico-Europe FTA sparks cheesy wrangle

The North American Free Trade Agreement (NAFTA) is getting all the headlines these days, but under the radar, Mexico is also renegotiating its Free Trade Agreement (TLCUEM) with the European Union (EU) at the same time.   Negotiators for Mexico and the EU recently concluded the ninth round of talks, and while progress overall seems to be satisfactory, a cheesy conundrum has hove to the fore.  The EU seeks to reserve denomination of origin rights to the names of numerous cheeses, but Mexico is balking hard at some of the items on the list.  The case of Manchego cheese is among the top sticking points.  Manchego cheese, named after its region of origin in Spain, is a beloved Spanish artisanal sheep’s milk product.  Mexico, however, produces large quantities of a decidedly un-gourmet cow’s milk cheese labeled as Manchego.  If the EU were to have its way, Mexican producers would no longer be permitted to use the Manchego name on their cheese products.

The Spanish would argue that Manchego cheese is a unique high quality product integrally related to a specific region of Spain, and permitting a low quality product to use the name tarnishes the reputation of the original product and dishonestly uses a name associated with quality to sell an inferior product.  Mexico’s dairy products association Canilac argues that Manchego is actually a variety of cheese, and in fact, the vast majority of “Manchego” cheese sold in Mexico is the domestic version.  They say it would be unfair to allow the Spanish suddenly to be granted exclusive access to a cherished product name and along with it, a US$250 million annual market painstakingly established by domestic producers.

The head of Mexico’s Canilac argued in a published interview that no consumer would confuse a Mexican Manchego for its Spanish counterpart, and as such the two products can peacefully coexist in the same market (Mexico, it should be mentioned, appears to show no interest in exporting its own Manchego cheese to Spain).  Spain retorts that independently of the idiosyncracies of the Mexican market, the two products could go head to head in the much larger United States market, where less familiar consumers are more likely to confuse to two.

Piqued by the prospect, we ginned up some numbers on Mexican cheese imports (Figure 1) and found this: When you look at the category of cured or semi-cured cheeses of the type commonly associated with Europe, such as Parmesan and Gouda, the value of overall imports to Mexico jumped in 2017 to over US$140 million.  Within this segment, however, Europe’s share declined slightly while the USA’s share jumped by over 200%.  Many factors could explain this, of course, and we don’t know what they are, but the one thing that matters to Spanish cheese exporters is that their market share just dropped in this segment and they are getting cranky.

One industry source whose comments we read suggested that perhaps it’s time for Mexico to begin establishing its cheese’s identities based on its own locations and indigenous style types, à la the ubiquitous (and scrumptious) Mexican Chihuahua cheese.  We, as consumers, love this idea because Mexico makes wonderful cheese and as consumers, we eat the stuff rather than having to worry about selling it.  Ultimately, we just hope they can get this business sorted amicably so we can go back to worrying about the billions at stake with the NAFTA negotiations.


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