The Impact of Protecting EU Geographical Indications in Trade Agreements

Abstract

The European Union protects over 1,000 Geographical Indications for distinctive regional foods such as Parma ham and Feta cheese. This paper tests whether external protection of Geographical Indications through trade agreements has increased exports of European Union Geographical Indications. The answer matters for trade policy, because the protection of at least some Geographical Indications has been a red line in recent trade negotiations. We use detailed export data for cheeses, covering the 2004–2019 period. The analysis uses the latest trade models that take into account the possibility of zero-trade flows for certain goods. We find that legal protection of Geographical Indications in trade agreements does not generally lead to significant additional exports above and beyond the general export-promoting effects of trade agreements. This finding should limit international fears of protected Geographical Indications widely displacing comparable products made outside of the European Union. However, although there is no significant effect across the board, more detailed analyses do find significant effects. In particular, Geographical Indications of higher quality and with higher market shares do benefit from stronger external legal protection. Based on these findings, the European Union may want to refocus its demands for protection of Geographical Indications during trade negotiations.