The deal was reached during a visit by the EU's top agriculture official to China, which ended on Friday, and is due to be formally implemented by both parties in the coming months.
"EU exports of high quality products to China increased by 50 percent in 2010. This agreement will offer greater legal protection against counterfeit goods for these products on the EU and Chinese markets," EU agriculture commissioner Dacian Ciolos said.
Sales of heritage foods, wines and spirits are worth some 40 billion euros ($56.64 billion) annually to the EU economy, with global exports accounting for about 10 percent of the total.
The EU's executive - the European Commission -- hopes the agreement with China to protect 10 "geographical indication" (GI) products from each side will be extended to dozens more products in future, and ultimately lead to a similar accord globally.
Rival Camps
The EU and China, together with Brazil and India, are key proponents in a bloc of over 100 countries in the World Trade Organization (WTO) calling for an agreement on GI products in ongoing talks on a global free trade deal. [ID:nLDE6AE27G]
But they face strong opposition from countries including the United States, Canada and Australia, who see global protection of GIs as a threat to existing "generic" trademarks for domestically-produced goods such as Feta cheese and Parma Ham.
Canadian company Maple Leaf Meats , for example, has a trademark giving it the exclusive rights to the terms "Parma ham" and "Prosciutto di Parma", meaning exports of Parma ham from Italy are not allowed to bear these names.
Ultimately any global agreement on GI protection will most likely have to be hammered out as part of a deal in the Doha round of world trade talks.
But with WTO countries still seemingly far from an accord, the EU is already preparing for talks to extend its bilateral cooperation with China further, to cover to up to 100 to 200 products.
"There would be a clear benefit to EU producers, who want to see GIs given effective protection in non-EU countries where these products are exported," said Frank Fay, deputy head of the Commission's product policy quality unit.
Growing Market
Extending the scope of the bloc's cooperation with China could take some time.
Talks on the current product agreement began back in 2007, and it will only finally enter force later this year.
But with EU agricultural exports to China experiencing phenomenal growth, particularly for quality brands, the potential rewards are significant.
Spirits currently lead the way, with EU exports having risen more than tenfold since 2002 to 400 million euros last year.
But with the EU's share at just one percent of a Chinese market for spirits estimated at 40 billion euros annually by the Commission, European producers such as Diagio and Pernod Ricard are keen to capitalise on the country's growing taste for imported brands.
Chinese producers too are likely to benefit from increased trade cooperation, with the country currently enjoying a surplus in trade in agricultural products with the EU, with exports worth 3.9 billion euros compared with imports worth 3.3 billion. (Reuters)
