Fri, Sep 12, 2003 page12

• EU raises the stakes in WTO food fight

  PLACE OF ORIGIN Despite opposition from Canada, Australia and the US, European trade negotiators intend to seek much stricter regulations for ``geographical`` foods

  • BLOOMBERG
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  The EU will seek more regulation of food and drink origin labels such as Parma ham and champagne at World Trade Organization (WTO) talks this week, outlining a plan the US, Canada and Australia call protectionist.

  The EU wants the WTO to boost support for "geographical indications" that help the bloc export more than 10 billion euros (US$11.2 billion) a year of foods, wines and spirits made by companies including LVMH Moet Hennessy Louis Vuitton SA. As WTO members meet in Cancun, Mexico, the EU is demanding exclusive rights over 41 names because of their European origins.

  "There's more than a whiff of protectionism in the EU's proposal," said Douglas George, head of the trade unit at the Canadian mission to the EU. He says Canada is a land of immigrants who brought food-and-drink expertise with them from Europe. Canadians now commonly use many of the product names.

  The EU proposal is part of a decade-long dispute among WTO members over whether to create an international registry of geographical indications for farm products. An EU victory may give poor countries such as India more rights over traditional names such as Darjeeling tea while restricting rich countries' ability to use the protected names for their own products.

  Unlike a trademark, which gives a company an exclusive right over a registered slogan, emblem or identifying mark, a geographical indication identifies a good whose quality and reputation are attributable to its place of origin.

  The EU has about 2,100 geographical indications, adds names regularly and protects them in trade agreements with countries such as South Africa. A WTO registry would make it more difficult for other nations to use the indications on the list. The 15-nation bloc says its producers are being handicapped and consumers elsewhere misled.

  "We have an advantage in names like Roquefort," said EU Trade Commissioner Pascal Lamy. "And as a consumer, you want to know what you are getting. It's a question of fairness."

  The EU is targeting Canada because Maple Leaf Foods Inc, based in Toronto, has a trademark for ham named after the Italian region of Parma. As a result, Italian Parma producers aren't allowed to sell ham in Canada under that name and have lost sales worth up to 3 million euros a year, says David Thual, representative in Brussels of the Parma Ham Consortium that groups all 200 ham producers in the Italian region.

  "It's a big problem," he said, adding that lawsuits in Canada by Italian Parma makers have failed and they have resorted to using the brand name "Original Ham" in the country.

  Thual is also spokesman of a group called ORIGIN that promotes geographical indications generally. He says the WTO isn't doing enough for makers of these products.

  "Other producers know you'll get a premium price for a gourmet product and you can restrict competition at the same time," he said. "It's a clear barrier to trade."

  The Geneva-based WTO agreed to protect geographical indications in a 1994 agreement on trade-related aspects of intellectual property rights, or TRIPs. The accord discourages trademarks containing geographical indications when they are misleading about a product's origin, offers stronger protection for wines and spirits and allows exceptions for long-used or customary names and for trademarks acquired in "good faith." The agreement also pledges negotiations on an international system for registering geographical indications. The talks haven't progressed.

  Wines and spirits get more WTO protection because they account for about 70 percent -- or 1,500 -- of the EU's geographical indications. The EU exports 10 billion euros of wine and spirits a year, most of which are covered by geographical indications.

  The "vast majority" of the EU's 4.4 billion euros in wine exports is covered by the system, according to Marion Wolfers, secretary general of the EC Wine Committee, which represents 19 European wine associations.

  About 4.5 billion euros of the bloc's 5.5 billion euros in spirits exports are geographical-indication goods, mainly scotch and cognac, said Caroline Schickel, project manager at the European Confederation of Spirits Producers in Brussels.

  Still, EU producers say the WTO protection for wines and spirits isn't sufficient.

  "It's vital that we enhance the protection," Schickel said. "There is still a lot of counterfeiting even though we have special protection in the TRIPs agreement."

  A dispute within the EU over feta cheese highlights the difficulty of establishing a geographical-indication system at WTO level. Denmark, which markets the white semisoft cheese, has asked the EU's supreme court to deny Greece the exclusive right to use the name.

  Still, the EU says it has the support of countries including India, Thailand, Kenya, Switzerland, Turkey, Poland and Hungary in seeking more protection for geographical indications. Hungary, due to join the EU in May, said last week it would back the bloc's demand to reclaim 41 names and added four of its own products -- including Tokaj wine -- to the list.

  The Parma group's Thual says the EU proposal is an effort to revive the WTO debate about geographical indications.
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