When doing your weekly shop have you ever observed the small blue/yellow and red/yellow circles that appear on the wrappers of Wensleydale cheese or Parma ham? Such indicia are examples of geographical indications (GIs), or appellations: they show that a product possesses certain attributes (taste, smell, texture) that are unique to a specific product and which can only be derived from a tightly demarcated and fiercely protected geographical region. The relationship between product attributes and geography can be summed up in one word: terroir. These GIs formed an important part of the EU’s agricultural policy, launched in 1992 and represented by the logos PDO and PGI, to insulate EU farmers from the effects of globalisation by encouraging them to produce ‘quality’ products that were unique.
GIs have a considerable lineage: legislation enacted in 1666 reserved the sole right to ‘Roquefort’ to cheese cured in the caves at Roquefort. Until the later nineteenth century domestic legislation was the primary means by which GIs were protected from misrepresentation. Thereafter, the rapid acceleration of international trade necessitated global protocols, of which the Paris Convention for the Protection of Industrial Property (1883) and its successors, including the Madrid Agreement for the Repression of False or Deceptive Indications of Source on Goods (1890).
Nonetheless, both protocols had defects, including: restricted ability to prevent the import of products bearing only a false indication of geographical origin; failure to provide an unambiguous definition of appellation until 1958 and concerns that the Madrid Agreement undermined the independence of national courts. However, arguably the biggest weakness with both concords between 1945 and the early 1990s was that they were tangential to the emerging global architecture constructed by the General Agreement on Tariffs and Trade (GATT), to ensure ‘freer’ trade.
Misalignment between the Paris and Madrid protocols on the one hand, and GATT on the other, suggests different interpretations of ‘free’ trade. The former focused on preventing misrepresentation: products should be accurately marked with their geographic origin to protect the goodwill enshrined in GIs (which benefitted producers), and to ensure that consumers were not duped (unable to exercise a genuine preference). In contrast, GATT was more concerned with tariff barriers and quantitative restrictions to trade.
Efforts to overcome this impasse became apparent during the Kennedy Round (1964-67) which addressed non-tariff barriers to trade. But it was not until the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), which became operational in 1995, that GIs (and intellectual property), became embedded in trade talks. TRIPS is binding on all members of the World Trade Organisation (WTO), which replaced GATT in 1995.
However, TRIPS brought into conflict differing national regulations protecting GIs — which had previously existed in harmony. This friction was exemplified by the EU versus the ‘New World’, especially North America, and contained three major issues. The first was coexistence: should GIs be registered as ‘normal’ trademarks, which was the case in the US, or should they be categorised as a distinct form of intellectual property (sui generis), as in the EU? In the EU scheme GIs had precedence over trade marks. This topic was more than simply an academic issue: it had real-word consequences. Thus, how to protect the Czech GI ‘Budweiser Budvar’ from Anheuser Busch’s trademark ‘Budweiser’?
The second issue was the allegation that the EU’s GI regulations were discriminatory because they favoured EU citizens. California raisins, Idaho potatoes and Vidalia onions were recognised as GIs in the US (under US trademark law) but they could not be registered as GIs in the EU. Consequently, US appellations received a higher level of domestic protection than they enjoyed in the EU.
The final source of conflict involved the treatment of generic terms which indicate mode of manufacture, not place of production, for example, brussels pate, cheddar, hamburgers and frankfurters. Traditionally, generic terms were incapable of registration as GIs. However, in 2003, and again in 2006, the EU attempted to claw back the terms Bordeaux, Chianti, Jerez and Rioja wines and Comte, Feta and Mozzarella cheeses, which were protected as GIs in the EU, but treated as generic or classed as trademarks in other countries. This particular battle reopened broader debates about the extent to which efforts to make international trade ‘freer’ by removing tariffs and other quantitative restrictions, conflicted with attempts to make trade ‘fairer’, in the sense that the geographical origin of products was not misrepresented.
At the heart of all these issues are more fundamental questions: whose interests are paramount, consumers or producers? Is the EU scheme an example of cultural hegemony by which it seeks to extract monopoly rents from global consumers of its produce? And what obstacles confront less developed countries in their attempts to promote their own GIs, for example, Café de Colombia and Darjeeling tea? Currently, EU-US conflict over GIs, and intellectual property more generally, are key obstacles to restarting talks on the Transatlantic Trade and Investment Partnership (TTIP).
- This blog post draws from the author’s book Brands, Geographical Origin, and the Global Economy, Cambridge University Press, May 2018
- The post gives the views of its author(s), not the position of LSE Business Review or the London School of Economics.
- Featured image credit: Wensleydale Creamery, by Emma, under a CC-BY-2.0 licence
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David Higgins is a professor of accounting and finance at Newcastle University. He received his PhD in economics from the University of Cambridge. He is a member of the Economic History Society, and was elected a fellow of the Royal Historical Society in 2007. He was formerly secretary and treasurer to the Association of Business Historians. Currently, he is chair of the Economic History Society’s Public Engagement Committee. Twitter: @DavidM_Higgins