The agreement of a free trade deal between the EU and Chile appears to rest on the issue of European appellations. EU negotiators are insisting that Chilean companies should stop using names of European drinks like Champagne, Bordeaux, Burgundy and Cognac as generic descriptors for their own domestic products. The Chileans want a delay before complying on this issue.

Defending such names is becoming an increasingly important element in EU trade policy. In fact, the EU wants the WTO to institute a directory of protected names.

The US and other New World countries oppose this saying it would be too bureaucratic and would be a licence for protectionism. Names such as Champagne and Cognac are still used freely in the US, a subject which the EU and the US have been negotiating.

South Africa signed a deal with the EU in January which involved significant aid but a stipulation was that South African producers should cease to use of the names Port, Sherry, grappa, and ouzo over the next 12 years. Chile is thought likely to be forced to make a similar concession if it wishes to conclude the free-trade talks before the EU-Latin American summit in May.