Champagne and parmesan under threat from Brexit

The EU is demanding Britain legislate to recognise products such as champagne, parmesan and beaufort cheese after Brexit, in a position paper seeking to protect some of Europe's most sensitive exports in future trade relations.

The unexpected request on post-Brexit intellectual property rights, including “geographical indications” (GI) for food and wine, comes in one of six EU position papers circulated on Wednesday.

The attempt to secure one of the EU’s important offensive trade interests is the first time the European Commission has brought long-term commercial concerns into separation talks. It is likely to come as a welcome surprise to London, which has long pushed for negotiations to cover future terms of trade.

To the ire of London, the EU has insisted the first phase of talks should be strictly limited to the orderly disentangling of past relations. The request on food and wine has added political resonance since Boris Johnson, Britain's foreign secretary, was derided last year for suggesting the EU would offer a good Brexit deal to Britain because it would not want to "sell less prosecco" to UK consumers.

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The draft commission position paper, to be published on Thursday, calls for the protection enjoyed by holders of intellectual property rights “not to be undermined by the withdrawal of the UK from the EU”.

This would require holders of existing rights to be able to enforce them in the UK market for years after Britain’s departure, a demand that would likely require new parliamentary legislation. In return, the EU offers to automatically recognise eligible intellectual property rights in the UK.

Traditional specialities

The commission acknowledges that “specific domestic legislation” may need to be introduced in the UK since there is currently nothing on the UK statute book to protect designations of origin, such as traditional specialities and criteria for wine.

The EU has over 3,300 protected food and drink products which have a specific geographic origin. The recognition, for the likes of Italian parma ham or French cognac, protects against “misuse, imitation or evocation of their name”.

Sales of protected labels accounted for 6 per cent of the EU’s food and drink sector in 2010, worth €54.3 billion. The products are sold on average at a price twice as high as similar non-GI products.

British examples include Kentish ale, stilton blue cheese and Cornish pasties. There are pending applications for protected status for Scottish Dundee cake and Devon cider among others.

Protected food products is one of the EU’s highest priorities in trade talks and became a flashpoint in recent negotiations with the US, Canada and Japan.

Syed Kamall, a UK Conservative MEP who leads the EU parliament’s European Conservatives and Reformists group, said: “Untangling the existing relationship by definition creates a new relationship. It was inevitable that a lot of issues that we consider to be trade issues would have to be discussed much earlier than envisaged.”

A separate EU paper on data protection said information flows between the UK and Europe could continue before exit day as long as Britain abides by the bloc’s existing laws. Any failure to do so would require the UK to destroy and delete all information held on European subjects.

Free flow of information

In its position paper last month, the UK hinted it would closely mirror the EU’s data protection framework after Brexit in a bid to secure the free flow of information that is vital in underpinning the modern economy.

The commission also drafted a document outlining its “guiding principles” on issues relating to Northern Ireland, in which it avoids concrete suggestions on how to avoid a hard border with Ireland.

“The present paper does not put forward solutions for the Irish border,” the commission states. “The onus to propose solutions which overcame the challenges created on the island of Ireland by the UK’s withdrawal and its decision to leave the customs union and the internal market remains on the UK.”

It adds that the “unique solutions” required “cannot serve to preconfigure solutions” about future UK-EU relations. The commission, for instance, asks whether “specific provisions” should be included in the Brexit withdrawal agreement to address the fact that North-South co-operation in the peace process is underpinned by common EU law.

– (Copyright The Financial Times Limited 2017)