International Trade and the Ontology of Parmesan

Flexing the muscles of its headline writers, The Economist has in its most recent edition a short piece entitled “Stressed are the cheesemakers”, in which a brief overview is given of the European Union’s desire to secure protected status for 145 food names as part of ongoing Transatlantic Trade and Investment Partnership negotiations. The story’s human face, Ron Buholzer, worries that if the Europeans get their way:

…he may soon be banned from selling [his feta], because the European Union is trying to “claw back” food names that Americans consider generic but which Europeans believe should only apply to products made in specific bits of their continent. That includes feta, Parmesan and maybe even bologna.

At first glance, this seems ridiculous. What is the point of negotiating a free trade agreement that includes stringent and possibly costly labeling requirements for American firms. Sure, I suppose it’s a good thing you can’t call fizzy white wine Champagne unless it’s from Champagne, because nothing as cheap and terrible as Andre deserves such a classy moniker, but otherwise – really? It’s not like anybody was going to mistake this for the real deal when it comes to cheese, so why bother imposing the costs of extra regulation? Let consumer behavior sort it out; if they want real Parmesan as opposed to the Kraft foods version the market will respond accordingly.

One might retort that this is too simplistic – in a crowded marketplace it might actually be quite difficult for consumers to tell the difference between Parmesan from Parma and Parmesan from not-Parma. But as long as laws against false advertising in general remain and are enforced, this alone isn’t compelling. If American cheese makers insist on calling their versions Parmesan, then the Italians can respond with “Parmesan from Parma” and everybody goes home happy, since anyone else who claims to be making “Parmesan from Parma” will be guilty of false advertising.

But even this result could be problematic, for a handful of related reasons. People might object on ontological grounds – something from Wisconsin simply cannot be Parmesan. Or you might take issue with the burden of differentiation falling on the original Parma-ites as opposed to the foreign interlopers hawking inherently sub-par knockoffs; why should they have to pay extra to defend the veracity of their product when they’re the ones who invented it 100s or 1000s of years ago? This arrangement might be the most free-market, but it’s also tremendously unfair. Weighed against a set of first-principles that favors minimizing government involvement in markets unless obvious market failures can be remedied, none of these are particularly compelling reasons for subjecting the products of American cheese makers to extensive labeling requirements. If ontology and fairness are poor arguments for government-regulated cheese names, though, cultural preservation might actually be a good one.

One imagines the cultural preservation argument holds that there is something inherently valuable to maintaining practices and processes of production with such distinctive and, for the regions where they are conducted, definitive characteristics. Even if it would be cheaper for the consumer to allow the market to push the costs of labeling and product authentication onto, in the case of Parmesan cheese, the cheese makers of Parma, we should be willing instead to pay the slightly higher prices associated with having the Kraft Foods of the world bear those costs because doing so makes it easier for Parma’s Parmesan-ers to survive and prosper and thus preserve valuable regional heritage. Obviously this is a fairly stylized description of the market structure for Parmesan cheese or any other product with similar status. It may very well be that Parma’s Parmesan cheese makers are all enormous firms and it is instead artisanal American cheese makers who would be adversely affected if Parmesan were to get protected status under TTIP. And I suppose the harder-core neo-liberal you are, the more likely you are to read that last sentence and say, “well, yes, of course, and this is precisely why government intervention in markets should be limited to cases of clear market failure.” Prima facie, this is compelling. But note above “practices of production” – deployed on purpose to suggest that, in the most anthropological and sociological sense of the phrase, the way certain items are produced in certain areas may have communal and social importance beyond simply the profitability of the companies doing the final production.

And I’m actually fairly receptive to the cultural preservation argument – not to fetishize the past, but I think things like production processes that have been developed over generations and are integral to a place’s sense of self are worth preserving. Unfortunately, there’s a major potential problem in forcing the United States to play by Europe’s rules when it comes to cheese production. Right now, consumers benefit from access to low-cost American knockoffs and the European real deal. If American and European markets merge with a set of rules that favors one side over the other, who can say what the resulting effects on cheese purchasing options will be? That question is asked fairly tongue-in-cheek, but it’s illustrative of the division of labor a globalized economy facilitates, and a similar (division of labor, that is) phenomenon can be observed with medical research, wherein American healthcare spending foots the bill for the work that underpins all kinds of treatments to which Europeans (and people in other countries) subsequently get access at much lower prices. Until the Bilderberg Group achieves one world government, globalization leaves us likely to be trying to reconcile asymmetrical markets across an increasingly wide array of goods and services. Cheese is just the beginning.