Why a U.S. court ruled Americans can produce Gruyere cheese : The Indicator from Planet Money A US District Court just ruled Gruyere cheese can be made outside of the Swiss French border region – including here in the US. Today, what this court battle over a cheese has to do with global trade.

Cheese wars

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SYLVIE DOUGLIS, BYLINE: NPR.

(SOUNDBITE OF DROP ELECTRIC'S "WAKING UP TO THE FIRE")

SALLY HERSHIPS, BYLINE: Hey, Adrian.

ADRIAN MA, BYLINE: Hello, Sally.

HERSHIPS: Pop quiz time.

MA: Oh, no. OK.

HERSHIPS: You're so psyched. Do you know where gruyere the cheese comes from? No pressure.

MA: France.

HERSHIPS: You are very, very close, 50%.

MA: What?

HERSHIPS: Well, according to the EU, gruyere comes from certain regions of Switzerland or France. But according to a judge in a U.S. district court in Virginia, most American shoppers do not know what you know. They just think of gruyere as, like, a kind of cheese.

MA: Like, maybe you throw it in a mac and cheese or you've had it melted on top of French onion soup, that kind of thing.

HERSHIPS: Exactly. But this is exactly the problem. According to this judge, gruyere has become generic. If you read the decision, you will see that it says cheesemakers anywhere can make gruyere. Score - American cheese makers 1, French and Swiss cheesemakers, fromagers, 0.

MA: So how do we get here? How did Swiss, American and French cheesemakers and up locked in this court battle in Virginia fighting over gruyere? One theory - trade. Marc Busch is an expert in international trade.

MARC BUSCH: Trade giveth and trade taketh away.

MA: The global market for cheese is worth $72 billion a year, and we haven't even gotten to wine, olive oil. The numbers are huge. I'm Adrian Ma.

HERSHIPS: I'm Sally Herships. This is THE INDICATOR FROM PLANET MONEY. Today on the show, food fight - and how the battle was started inadvertently by trade.

(SOUNDBITE OF MUSIC)

HERSHIPS: Imagine that you're standing in a grocery store somewhere in the world. A lot of food that ends up on store shelves and how it's priced is the result of trade deals between different countries. But there's this one specific ask that countries also try to insert into these deals. They're called geographical indications. Marc Busch teaches international trade policy and law at Georgetown.

BUSCH: A geographical indication means that the quality is derived from the region. The reputation of the product is from a place. Washington state - apples. Idaho - potatoes.

MA: And champagne. You know, the idea is, to make champagne, the grapes have to be grown in the Champagne region of northeast France. And countries often ask for these kinds of geographical indicators as intellectual property when they sign trade deals. And then that deal typically has a list of geographic indications that the two sides have agreed to.

BUSCH: And these denominations of origin, these geographical indications are largely found in the European Union. And it's kind of a new-world-versus-old-world fight where the old world claims them and the new world challenges them. And that's what goes on.

HERSHIPS: And you stand to miss out on a lot if you do not nail down protection for your name. Take the cautionary tale of cheddar. Cheddar originally comes from a village called Cheddar in the southwest of England. Here is an ad from the 1980s. It features two talking, walking wedges of cheese trying to get consumers to buy cheddar made only in England.

(SOUNDBITE OF AD)

UNIDENTIFIED ACTOR #1: I say, Cheddar. Chap in reception says he's you.

UNIDENTIFIED ACTOR #2: What?

UNIDENTIFIED ACTOR #1: Says his name's Cheddar.

UNIDENTIFIED ACTOR #2: Oh, that's one of our overseas visitors.

UNIDENTIFIED ACTOR #1: Thought he looked a bit on the foreign side.

UNIDENTIFIED ACTOR #2: Well, he's not an English Cheddar, if that's what you mean.

MA: Well, that 40-year-old cheese ad might come across as a little xenophobic. But anyway, the name cheddar never got that protected status. And now cheddar is one of the U.S.'s most popular cheeses. Retail sales of cheddar are $4 billion a year. And, you know, the English cheddar folks think that if they could have held on to that designation, they could get a bigger cut of that cheese. Anyway, back to gruyere.

BUSCH: We don't have a trade deal with the European Union.

MA: And that means no list of protected geographical indications.

BUSCH: They undoubtedly would have listed this in their intellectual property chapter, among many others. But it is interesting that, whereas the European Union was able to get 168 geographical indications from Canada, they only got 72 from Japan. How many they would have gotten from the United States is a big mystery.

HERSHIPS: But we won't know because, in 2019, negotiations on the Transatlantic Trade and Investment Partnership were formally closed. Part of the roadblock was these protected foods. If you're an American politician, imagine trying to tell Kraft Foods or some giant company that it can no longer produce one of its products like parmesan cheese, because parmigiano reggiano is a protected food from Italy.

MA: And similarly, you know, the European negotiators and politicians didn't want to tell their farmers and cheesemakers they couldn't swing a deal to get the products protected. So instead, we get this piecemeal approach that can mean litigation.

HERSHIPS: Which is exactly what happened with gruyere. Swiss and French cheesemakers filed an application with the United States Patent and Trademark Office to register the term gruyere and protect it. American cheesemakers filed against it. And the American judge sided with the American cheese industry and said anyone can make gruyere.

MA: In the meantime, the EU has most of these protected names - Burgundy, Chianti, Cognac. And they are super valuable. And here is the challenge for those food producers. If they do too good a job at marketing and your special Swiss cheese becomes too popular, you risk becoming generic. You know, a judge could say, well, this could be made anywhere. And that's what U.S. producers are celebrating about right now. They say no consumer would have made the connection between gruyere the cheese and a place near the Swiss-French border.

BUSCH: So there's the fight. And the fight is deep. And the fight is global. And trade agreements, ironically, are the means by which these geographical indications are dispersed, but ultimately may be the Achilles heel of them. Because with enough trade from enough countries, the decision, like here in the United States on gruyere, may come down to, well, they're generic because consumers are used to getting this product from anywhere.

HERSHIPS: And becoming too popular can create another problem. Back to champagne. First, you need to know champagne is different than Gruyere. Champagne has its own special history. The French originally negotiated a deal to have champagne protected way back in the Treaty of Versailles in 1919, but the U.S. never ratified the treaty. So champagne was not really protected until 2006, when we signed another agreement on trade and wine with the EU. But that didn't stop champagne from being really popular, which led to this other problem - supply and demand.

BUSCH: Supply keeps being undermined by demand, or at least supply isn't meeting demand. And the French have oftentimes tried to unilaterally grow the Champagne region of France, leading the United States government to question whether that too is now sufficiently generic, such that anyone can produce a sparkling wine and call it champagne.

MA: And Marc says the fight is getting even bigger, right? Like, take the word chateau, which causes a big headache for French winemakers. There are all these U.S. winemakers which use chateau, even though chateau doesn't refer to as specific part of France. The French insist, you know, chateau implies European, so to call something chateau in the U.S. is misleading consumers. So French wine producers want U.S. producers to be denied that right to use it.

HERSHIPS: But bringing this away from champagne and back to the gruyere case, Marc says the case is being appealed.

MA: Seems like this is going to continue to be a wedge issue in trade policy.

MA: Let's just melt all the borders.

MA: That would basically be shredding up the trade policy.

HERSHIPS: Cheesemakers just want to spread the wealth.

MA: This was a real Kraft singles of a story. OK. I'm done. This episode of THE INDICATOR was produced by Brittany Cronin, with engineering from James Willetts. It was fact-checked by Corey Bridges. Viet Le is senior producer. Kate Concannon and edits the show. And the INDICATOR is a production of NPR. Cheese.

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