The rise of the gastronationalists

Farming kingpins like France, Spain and Italy are looking to seize upon Europe’s increasing protectionism to keep Chinese honey and Canadian durum wheat off the Continent’s dining tables.

As the EU swings to a more defensive position across economic policy in sectors ranging from high-technology to cars, the gourmet powerhouses of the Mediterranean this month sensed the moment had come to make a big stand to protect their dairy farmers and spaghetti makers.

The gastronationalists know that this will lead to a battle over one of the most prickly topics in EU policymaking: mandatory origin labels, which make it compulsory to stamp foods with “Made in France” or “Product of Italy.”

On December 16, France, Spain, Italy, Portugal and Greece sent a joint declaration to the European Commission asking it to “strengthen and harmonize EU legislation on origin labeling of food,” and stressed that current EU rules “are not comprehensive in this area,” because they are “not mandatory.”

In the often subdued world of EU policy demands, this is a bombshell. For years, EU bureaucrats in Brussels charged with safeguarding the single market and EU trade relations have taken a dim view of mandatory labels. In recent years, such labeling has only been allowed as a temporary crisis measure to support French dairies and Italian suppliers of grain for pasta.

The EU officials’ first concern is that such labeling undermines the EU single market by encouraging consumers — and purchasing managers at supermarkets — to prefer domestic products. In 2017, Belgium complained, for example, that obligatory “Made in France” labels on dairy slashed Belgian milk exports to France, even though a Belgian farm may be the closest supplier to a French shop.

The EU’s second concern is that countries outside the EU are willing to retaliate over obligatory labels with trade weapons. In 2018, Canada protested that Italy wanted spaghetti makers to label the provenance of durum wheat used in pasta as a way to bolster Italian grain farmers against Canadian rivals.

Despite these protests, the southern European quintet now reckons the time is ripe to shift mandatory lableing to something more permanent, rather than an emergency sticking plaster.

The Commission has signalled it is, at least, willing to listen. Stella Kyriakides, the EU’s new health and food safety commissioner, responsible for food labeling, argued that a hotch-potch of national measures — like the French dairy labels — was not “a sustainable way to go forward.”

“We need to find a long term solution on EU level,” she said. Food labeling would be an important part of the new Commission’s landmark “Farm to Fork” food strategy, she said, which Brussels planned to unveil next April.

Cultural exceptionalism

Trade lawyers traditionally see origin labeling as a way for countries to discriminate against foreign imports.

“The idea is that consumers are prejudiced,” said Lorand Bartels, a lecturer in trade law at the University of Cambridge. “And measures like origin labeling can leverage that prejudice.”

A country that sees its exports slump as a consequence of such labeling rules could argue that case at the World Trade Organization, Bartels said. “A WTO panel would look into whether the requirements are too burdensome,” he added.

Still, Bartels argued that if Brussels introduced EU-wide measures, it had a decent chance of winning any WTO challenge by essentially arguing European cultural exceptionalism.

“Providing consumers with information is a legitimate objective and origin is a legitimate information,” Bartels argued, especially for Europeans, who inherently care about the origin of their food.

“In the EU, culturally speaking, consumers are sensitive to the origin of their food. So the EU could argue at the WTO that its consumers want to have that information. In other countries, this could be harder,” said Bartels.

EU ministers are already adopting that line of argument. European consumers are becoming interested in where their food comes from not only to support local farmers and regional culture, but also to combat the carbon footprint of foodstuffs that may have been transported from the other side of the planet.

“The whole idea is that more and more people, especially consumers, want to know what they eat and where it comes from,” Makis Voridis, the Greek agriculture minister, told POLITICO.

Voridis said that the Commission should “harmonize” EU rules so that across the EU the same rules on labeling are applied. Labels should indicate the origin of their “primary ingredient,” Voridis said, adding that this should be country-specific.

For Greece the most important labeling targets are yogurt, cheese, wine and olive oil, Voridis said, and more widely he would see meat and dairy products covered by the new rules. During a farm ministers’ meeting on December 16, the Cypriot representative said Nicosia would like to have mandatory labeling on processed vegetable products, while several countries stressed the importance of indicating the origin of honey.

Single market woes

Not everybody in Europe agrees, however. At the ministerial meeting, several countries were opposed to stricter origin labeling. The Czech Republic, Denmark and the Netherlands stressed that the changes could undermine the single market and would be an additional regulatory burden for food producers.

Big EU food processors, who rely on all-year supply from across the world, are also hostile. “[Such rules] could compromise the constant availability, affordability and quality of supply throughout the EU,” said Dirk Jacobs from FoodDrinkEurope, a lobby.

But Greece’s Voridis disagreed. “I’ve heard this argument: we want an internal market. Who says no? It’s [still] going to be an internal market … In order to have free competition and really a completed internal market … you must provide the information,” he added. “Because the part of the competition is that the consumers must be able to decide, having all the information on the table.”

Bartels felt the same way. “The whole idea of international trade law is that governments should let consumers choose for themselves, and that depends on consumers knowing what they are buying. And that can require regulation. Labeling can help deal with information asymmetry,” where companies know more about the products than the consumers buying them.

Proponents of origin labeling also point to consumer research.

“Origin tops consumer concerns when buying food, as a recent EU-wide poll showed, and over one million Europeans have signed a petition urging the Commission to come up with proposals to increase food origin transparency,” Camille Perrin at BEUC, a consumer organization, said.

The timing of the move by the southern European five is not accidental: in April 2020, a new law on the labeling of the origin of the primary ingredient of food products is coming into effect.

Behind it all, there’s a simple rule: if a food producer decides to put the origin of food on a label, for example calling a product “Greek yogurt” or “Belgian chocolate” but the main ingredient of this product comes from a different place, it must be clearly indicated (for instance: “a Greek yogurt with milk from Romania”).

The law is not very strict, however. The label doesn’t have to specify a country of origin, it’s enough to signal the ingredient was produced in “the EU” or in a “non-EU” country, or only indicate a region, for example “Mediterranean.”

In April 2020, several exemptions for mandatory origin labeling in some of the EU countries, like those on French dairy and on the primary ingredient in Italian pasta, will have expired.

The exemptions were treated by the Commission as a temporary experiment.

The question now is whether EU countries can convince Brussels to turn the “experiment” into the rule.

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