(Politico) - The divide sets up a major showdown as U.S. and EU negotiators work furiously to wrap up the trade talks before President Barack Obama leaves office. 

In Napa Valley and a smattering of other U.S. wine-making regions, vintners say they want Washington to give in to the European Union’s demands on “geographic indications,” which are like trademarks on brand names except that they apply to geographic regions — identifying a wine as chablis or burgundy if it’s from those places, for example.

But the rest of U.S. wine industry is holding firm to a deal Washington struck with Brussels in 2006 that allows American vintners to keep labeling their products with such regional designations so long as they were doing so before the agreement was struck. The deal — which safeguards nearly 1,000 European wine names — strikes the right balance in allowing established U.S. producers to keep the labels they’ve been using for decades, they say. The divide sets up a major showdown as U.S. and EU negotiators work furiously to wrap up the trade talks before President Barack Obama leaves office.

"They've already agreed to our system, [and] now they're trying to undo an agreement which everyone in an arms-length transaction entered into in good faith …," said Tom LaFaille, vice president and international trade counsel for the Wine Institute, a California wine industry advocacy group that opposes changes to the 2006 wine deal. “It's of extreme importance to us."

In March, the European Commission published a new proposal under the TTIP that would “update and improve” the 10-year-old wine agreement, ending American use of 17 semi-generic wine names and extending the 2006 agreement to distilled spirits, according to the Commission. It also would create a committee on trade in wine and spirits to manage changes to the list of protected names.

The move has the backing of French Trade Minister Matthias Fekl, a staunch opponent of the U.S. position on geographic indications, who met with Napa winemakers last week. Like French President François Hollande, he has warned negotiators they can kiss the TTIP goodbye if the EU’s agricultural demands aren’t met.