How French cheese and Champagne could become UK's secret Brexit weapons

The European Union has warned that Britain's hopes of a trade deal could be scuppered unless it recognises EU protections for food and drink such as Parma Ham and Champagne after Brexit.

The EU system for protecting foods in certain regions emerged as a major sticking point at a press conference in Brussels with Dominic Raab, the UK's Brexit secretary, and his EU counterpart Michel Barnier.

However, the ultimatum could strengthen the hand of British negotiators, as Italian and French food producers are said to be deeply concerned about cheap imitations of their products flooding the UK market.

For example, if the UK chose to stop recognizing the EU's food protections, British sparkling wine producers could label their bottles as Champagne, even though it does not come from the French region of the same name.

The food protection standards, known as "geographical indications," also apply to traditional British products such as Scotch whisky, West Country Farmhouse Cheddar and Stilton.

Mr Barnier said: "On geographic indications, I expressed again my worry. The EU's position is clear. Brexit should not lead to a loss of existing intellectual property rights."

"We must protect the entire stock of geographical indications. This protection is an international obligation. It must be clarified in the withdrawal agreement."

Trade experts said the food standards were one of the EU's most closely guarded assets and that Brussels might be tempted to offer concessions in exchange for protecting them.

"Geographic indications are essentially one of the EU's weapons when it comes to trade and it has managed to expand that approach globally, with Japan signing up to them recently with the EU-Japan agreement," said Sam Lowe, a senior research fellow at the European Centre for Reform.

"In terms of Brexit, the EU cares deeply about geographical indications, particularly Italy, and this may mean the UK could seek something in return for offering reassurance on GIs."

Food protection standards are just one of several areas of the terms of Britain's withdrawal from the EU which have still not been agreed upon.

Data protection, the Irish "backstop" clause, and the role of the European Court of Justice in any future agreement remain thorny topics, but Mr Raab insisted that "valuable progress" had been made.

"On my side I am stubbornly optimistic that a deal is within our reach if both sides grasp the opportunity," Mr Raab said.

Mr Barnier continued: "Week after week and step by step we are eliminating bones of contention."

At the same press conference, Mr Barnier said he hoped to forge an "unprecedented" security partnership with the UK after Brexit. 

But he added: "The preliminary condition to that is that we have to organise an orderly withdrawal of the UK. That's the condition of the unprecedented partnership in the future."