Protection of Geographical Indications: How Extensive Should They Be?By Samuel Benka // Monday, November 25, 2013
Strong intellectual property protections are an essential part of free trade agreements (FTAs). In the current negotiations for the Transatlantic Trade and Investment Partnership (TTIP), one area of intellectual property rights that is certain to create disagreement between the EU and U.S. is that of geographical indications, or GIs.
GIs are a type of intellectual property protection that works in much of the same way as trademarks. A product that has been GI certified has exclusive rights to use the geographical name of the location from which it originates. Article 22 of the Agreement on Trade Related Aspects of Intellectual Property Rights, or TRIPS, states that this geographical area has to be one “where a given quality, reputation, or other characteristic of the good is essentially attributable to its geographical origin.” Determining whether or not a product possesses the unique qualities that deem it worthy to attain GI protection status, however, is not the most contentious part of the debate. Instead, the main battle in discussions revolves around what to do with the names of products that have been in common use for generations.
GIs receive extensive protections within the European Union with as many as 3,000 products currently certified. In 2008, the European Commission estimated the value of GI protected products in the EU at about 14.5 billion euros (ca. 20 billion dollars). A full 82 percent of the turnover from GIs was consumed in the domestic market while only 5 percent of the value represented sales outside the EU. These numbers suggest that there is significant room for expanded growth outside the bloc if the EU can manage to expand protection for its GIs by its trade partners. Italy, Germany, and France in particular would be the biggest beneficiaries since they have the highest market value for GI products in the EU. The table below lists the top 10 EU countries as of 2008 in terms of number of GI products and their respective market value.The European Union expands its protection of GIs internationally by including provisions for them in FTAs. The EU-South Korea FTA includes almost 200 products with GI certifications. On the Korean market, scotch whiskey now has to originate from Scotland and feta cheese from Greece. The EU stresses that the purpose of protecting GIs is not to sell commodity products, but rather to protect the EU’s product specific export.
The U.S. also has GI certifications for many products sold domestically, some of the most prominent examples being Florida Orange Juice, Washington State Apples, and Idaho Potatoes. These and others may be included on the list that U.S. negotiators will be pressing for in the TTIP.
The United States is likely to oppose some of the GI protections that the EU will seek to include in the future transatlantic FTA. Under current U.S. rules, non-original producers may use the geographical indication of a product as long as it is clear where the product originates from, as illustrated by Korbel California Champagne. If the EU were to obtain GI certification of the term “Champagne”, this would create a number of problems for American producers of sparkling white wine, accompanied by significant economic loss.
Some observers in the United States have expressed concerns over the extension of GI status for products that have been on the American market for generations and that have become generic terms denoting types of food. According to the U.S. Patent and Trademark Office (USPTO), “once a geographic designation is generic in the United States, any producer is free to use the designation for its goods/services.” The EU takes a different approach and may very well seek to have these generic foods GI certified.
Meanwhile, the Consortium for Common Food Names (CCFN), an international alliance of food producers based in the U.S., believes that consumers will have to pay higher prices for food while their options in grocery stores will be more limited if extensive GI certification of European products are included in the TTIP.
The issue of geographical indications is not limited to the transatlantic debate. Members of the ongoing Trans-Pacific Partnership Agreement (TPP) have expressed concerns regarding excessive protections for GIs. New Zealand and Australia in particular are worried that EU standards for GI protection would harm their dairy industries by forcing companies to change product names. The U.S. is proposing that TPP countries that have already entered into deals with other non-TPP members such as the EU should limit their GI protections to only cover compound terms like “Mozzarella di Bufala Campana”.
Ultimately, U.S. trade negotiators will have to strike a deal with the EU that protects American companies and benefits the U.S. economy. It is conceivable that the U.S. will make some concessions on GIs in return for EU concessions in other areas. If a future FTA includes extensive GI protections, American businesses in the cheese and wine sectors could face significant obstacles. The recently concluded EU-Canada Comprehensive Economic and Trade Agreement, which includes provisions on GIs, may already start having a negative impact on these industries. Nevertheless, detailed projections for what effects future GI provisions in the TTIP are going to have on U.S. companies are difficult to make because negotiations are still in the early stages.
Image Credit: “IMG_0558“, courtesy of Flickr user Christopher Lewis