How the war on terroir was won – Part 1

In just a decade, geographical Indications (GIs) have passed from being a largely European niche – a Eurobsession, some say – to a globally recognised and appreciated form of intellectual property right, writes a former top EU trade negotiator.

John Clarke was, until October this year, the EU’s chief agricultural negotiator and was formerly the EU’s Head of Delegation to the WTO and UN in Geneva. He negotiated the EU-China GI Agreement and several others.

How did this happen? Is the globalisation of GIs going to continue? Do any dark clouds lie ahead?

To understand the phenomenon, we need to go back to around 2010, when two things happened.

Several things happened that year. The Chilean miners were rescued, there was an earthquake in Haiti, and South Africa became the first World Cup host country to get knocked out in the first round.

But for today’s purpose, two things. First, as part of its periodic revamp of the Common Agricultural Policy (CAP), the EU decided to accelerate the shift from quantity to quality, enhancing its support for GI (and organics) development.

The ‘Quality Package’ emerged, which saw reform and streamlining of the EU’s GI systems.

Secondly, following the collapse of the WTO Doha Round of multilateral trade negotiations, where the EU had unsuccessfully tried to set up a WTO register of all GIs and others, it moved decisively – promiscuously! – to negotiate bilateral Free Trade Agreements with all-takers to obtain via bilaterals what it had failed to do in Geneva – including GI protection, which rapidly became the centrepiece of the IPR chapters in each successive bilateral free trade agreement (FTA).

The Lamy doctrine:  “No new FTAs until we complete the Doha Round”, was supplanted by the Mandelson doctrine: “FTAs, fasten your seatbelts folks – here we go”.

The first wave of FTAs – Central America, the Andean Community, South Africa, and even Canada – were with major agricultural exporters. GIs were, at least implicitly, the currency of exchange for the agricultural concessions the EU had to offer these partners.

It was never as crude as “I give you sugar/beef/bananas, you give me Cognac/Feta/Mortadella Bologna”, but it was implicit.

This author, involved in several of these negotiations, recognised that grumbling European farm communities – and agriculture ministries – might acquiesce as long as their leading GIs got protection in other parts of the world where usurpation by local or American brands had been the rule, and given that we had to make some agricultural concessions in any case.

Korea, an early FTA, was the outlier here: GIs were the payback for the reduction of EU car tariffs, not agriculture. But this quiet horse-trading (horse-whispering!) approach changed.

With the second wave of FTAs –Japan, Vietnam, Singapore, Mexico, and even Chile – GIs ceased being the money of exchange and started to be negotiated and valued on their own merits.

To the point that many countries, even former sceptics like Japan, Korea and Singapore, decided that GIs were a GOOD THING – for rural development, for agritourism (wine routes anyone?), and to boost the income of struggling, usually ageing farmers.

These countries started to coax out of the undergrowth their own home-grown GIs – Kobe beef, Korean Ginseng, sticky rice from Vietnam, in Japan’s case, some remarkable white wines – and even set up sui generis regimes inspired by the EU. Unthinkable ten years earlier!

The EU itself was pleasantly surprised by this.

Not only did GIs become appreciated in partner countries, but the quality of protection in each successive FTA improved ratchet-like.

The early FTAs were flawed – heavy approval procedures for each name, fees to be paid, no direct protection through the agreements, no possibility to add new names in future (a problem in the light of new accessions to the EU), no active government enforcement against counterfeits, and considerable freedom for existing trademark owners of a commercially important EU GI name – Feta, Gorgonzola, Gruyere etc – to continue to do use their mark in perpetuity.

Later, FTAs swept away most of these flaws.

From 2016, the FTAs would feature direct protection of a list of GI names via the agreement with light procedures and no fees, administrative and ex officio enforcement becoming the norm, the phase-out of competing trademarks over five years or so, and a ban on subsequent genericness.

But also via the right to add new names over time (vital for Romania, Bulgaria and Croatia, who came late to the wine and cheese party), longer lists (the early FTAs protected on average a hundred or so European GI names by 2020 it was typically 200 names protected in each Agreement), and a guarantee that every single Member State would have at least one GI protected.

This is a priority of the present Agriculture Commissioner, who saw it as a smart way to get EU-wide buy-in to a hitherto southern European interest.

The wheel has turned full circle. From being seen – by some – as the currency of exchange for agricultural concessions, GIs are increasingly being negotiated as self-standing, internally balanced agreements. A significant achievement of this European Commission was to conclude in 2020 a bilateral GI-only agreement with China, to date, the sole trade agreement with that strategic partner (and competitor and rival…).

The Agreement protects 100 GIs of each party (China being understandably insistent on balance), although due to Brexit, four UK GIs lost protection, so only 96 EU GIs are now protected.

Having “lost” the UK market, China was unprepared to replace the four removed GIs with four new European ones.

The Agreement is now being expanded to incorporate a whopping 350 new GIs of the Parties, including Prosecco and Peking Duck, which – I suggested recently to China’s Vice Minister of Trade – are a marvellous culinary match!

India and the EU similarly launched free-standing negotiations last year, extracting GIs like a molar from the mandate of the FTA negotiations that faltered in 2013 and have restarted haltingly. So India and China are now paid-up members of the pro-GI brigade – China even has more GIs than Europe.

Like the EU, they see GIs as a tool to help struggling rural areas, for value addition at the farm gate, and as a symbol of heritage in a delocalising world – what former Agriculture Commissioner Phil Hogan once dubbed “Rural Intellectual Property”.

The EU is the world’s biggest agri-food exporter, knocking the US from this perch around ten years ago, with €230 billion of exports each year and a €50 billion trade surplus.

GIs have led the charge. As an 80bn EUR business, more than 15% of EU GI goods are exported worldwide, cementing Europe’s reputation for food quality, authenticity, safety and the like, and in doing so, burnishing Europe’s wider food and drink credentials.

So GIs, one can say without exaggeration, have been a success story for EU farming, the CAP, and trade. The FTAs have been the main driver of GI success.

But the FTA success story of GIs also had two unexpected consequences that were never factored into Europe’s initial negotiating strategy.

Next week, in the continuation of this article, we explain what these were and look at some of the challenges ahead. Stay tuned.