Italy could try to block the EU-Canada trade deal to protect its famous foods

  • Italy's agriculture minister suggested the country will not ratify a free trade agreement between the EU and Canada, saying that it doesn't do enough to protect the nation's specialty products.
  • The Comprehensive Economic and Trade Agreement (CETA) is a major trade deal for the EU and Canada.
  • PDOs and PGIs on certain products promote and protect the names of quality agricultural products and foodstuffs.
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Forms of Parmesan in aging warehouses of Parmesan and Grana Padano on January 01, 2012 in Fiorenzuola d'Arda.

Italy's agriculture minister suggested the country will not ratify a free trade agreement between the EU and Canada, saying that it doesn't do enough to protect the nation's specialty products.

"We will not ratify the free-trade treaty with Canada because it protects only a small part of our PDO (Protected Designation of Origin) and PGI (Protected Geographical Indication) products," Gian Marco Centinaio told Italian newspaper La Stampa Thursday, according to comments reported by Reuters.

The snappily-titled PDOs and PGIs promote and protect names of quality agricultural products and foodstuffs. In the 28-member European Union, Italy has the highest number of food products that enjoy these statuses, with 221 products protected. The number includes two products with the label "Traditional Specialty Guaranteed" which doesn't restrict a food item to a specific geographical location, these being mozzarella and Neapolitan pizza.

Centinaio said Italy wanted to "defend the quality of 'Made in Italy' products." Products in Italy with the PDO or PGI status include Balsamic Vinegar from Modena, Sicilian blood oranges, a range of regional cheeses including Grana Padano and Gorgonzola, meats, oils and vegetables, among other products.

Centinaio is a member of the right-wing Lega party which now makes up half of the new coalition government in Italy, along with the anti-establishment Five Star Movement. He said doubts about the agreement were not confined to those within Lega, however, stating that "many of my European colleagues feel the same."

The Comprehensive Economic and Trade Agreement (CETA) is a major trade deal for the EU and Canada and the national governments (and some regions) of all 28 EU member states must approve the agreement for it to come into effect.

Italy saying it will not ratify the deal represents another stumbling block for fragile relations between Europe and the new euroskeptic and renegade government in Italy. It has already clashed with Europe over spending plans, immigration and the single currency. A spokesperson for the European Commission wasn't immediately available for a response to Centinaio's remarks when contacted by CNBC.

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A shopper stands at the meat counter at the renowned Tamburini salsamenteria on March 29, 2017 in Bologna, Italy.

The European Commission states that CETA — a deal that took seven years to reach — will cut 98 percent of the trade tariffs between the region and Canada and will boost trade and investment. European companies will be allowed to bid for public contracts in Canada and the deal bans the sale of imitations of 140 European delicacies in Canada, the deal also foresees the harmonization of standards.

There has been hostility toward the deal, however, with critics of the agreement worrying that cheap Canadian imports could damage domestic businesses and lower standards protecting European consumers. One study published in the International Journal of Political Economy in March 2017 stated that CETA could cause 300,000 job losses and a rise in inequality.

The European Commission says CETA will make it easier and cheaper for Italian companies to export goods and services to Canada. Already, it says 13,147 companies export to Canada with 79 percent of these being small and medium-sized enterprises. It added that 63,000 Italian jobs are supported by EU exports to Canada.

The products that Italy already exports to Canada are ceramic tiles and textiles, flour, tomato sauce, vegetables, furniture and bakery products. The value of Italian exports to Canada is 5.1 billion euros ($6 billion) annually, whereas the value of Italian imports from Canada is 1.9 billion euros.

Cecilia Malmstrom, Europe's trade commissioner, tried to reassure the Italian public last year, saying that Canada had granted 143 European Geographical Indications (GIs) — of which 41 were Italian.

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