Why GI-tags will earn you respect in global trade

Nita Kapoor | Updated on October 04, 2021

Chablis wine got its name from the village in the Burgundy region of France   -  REUTERS

GI tagging is essential to combat the challenges arising from multilateral agreements

GI tagging is indispensable in the international trade scenario because it helps to retain the global reputation and worldwide value of a particular product produced in a specific geography.

Significantly, the foundations of both the EU and the WTO were laid during the post-World War II era, aiming to end the frequent warlike situations within the continent. In the 1950s, the Treaty of Rome created the European Economic Community (known as the Common Market), that encouraged European countries to do duty-free trade among themselves.

This body later came to be known as the European Union. Notably, the WTO was established based on the General Agreement on Tariffs and Trade (1947). WTO’s current governing clauses are derived from the Uruguay Round of GATT negotiations.

The Trade-Related Aspects of Intellectual Property Rights (TRIPS) based on the Uruguay Round Agreement gives a general grade of protection to all Geographical Indication goods. To benefit from the protection provided by the Agreement, the WTO members must ensure legal safeguards to prevent the misuse of GI tagged products.

When the Uruguay multilateral negotiations were taking place between 1986 and 1994, the European Bloc and the Swiss Confederation proposed a higher standard of protection for GI products than the pre-existing norms of international agreements. They even aimed for a multilateral registry of GI tagged goods.

The EU safeguards

The European Union safeguards more than a thousand GI tagged food items such as Feta cheese and Parma ham. The WTO promulgated the Geographical Indication of Goods Act, 1999, which came into effect in September 2003.

During the September 2003 multilateral negotiations, the European Union proposed a registration and notification system that created obligations for the WTO members to give prerogative for geographical indications, instead of allowing parties to register for protection as per their country’s legal process. This enactment meant that the GI product of one country would be protected in other territories as well.

By this system, they would extend protection to the wines and spirits mentioned in Article 23 of the TRIPS Agreement by instilling transparency and legal assurance in the wine and spirits’ international trade. For example, Scotch and Irish Whisky are two such GI products from United Kingdom and Ireland respectively.

Brands of blended scotch whisky such as Johnnie Walker, Chivas Regal or Single Malts like Glenmorangie, Glenfiddich, Glenlivet, Irish Whisky Jameson, etc. — all of which are unarguably the best in their categories — are all GI-tagged products and carry a certain niche and uniqueness. Thus, these GI-products, by the virtue of the TRIPS Agreement, are and must be protected in India as well.

US-EU wine talks

During the multilateral negotiations, the US and the EU have been in talks about the bilateral wine agreement. Here, the EU’s stand is to end the American use of semi-generic wine names while the US is seeking acceptance from the EU for their wine-making procedures. The EU and Switzerland’s proposal mentioned eliminating permission for the usage of names such as Champagne, Burgundy and Chablis.

Both the bodies asked so because the production of all three wines is region-specific. Champagne is named as per the area it is produced in, i.e., France’s Champagne region. Only a distinct type of grapes is pressed for this sparkling wine. Chablis has a similar case, the wine got its name from a French village and is made with Chardonnay grapes, which was originated in the French Burgundy region.

Covering farm products

TRIPS’ Article 23 proposes to extend GI protection to agricultural produce as well. This effort is to liberalise global agricultural trade, and trade the cultivated goods with a higher value. The proponents have also stated that by doing this consumers’ interests would be safeguarded more effectively. The proposal also encompasses the agricultural issues of market access and negotiations, export subsidies and domestic support.

Agricultural GI protection prevents bio-piracy, which is unrecompensed exploitation of the emerging nations’ naturally occurring resources. This is an alarming issue in Asia, given Thailand’s bio-piracy case related to its jasmine rice. In this case, a new hybrid variant of the rice was launched under the name Jasmati.

The term Jasmati was coined by two rice variants present in the Asian continent, Jasmine and Basmati. After the launch of the rice, concerns arose that consumer would mistake the rice for possessing qualities of both Jasmine and Basmati rice. This concern was amplified when the outcome of a survey conducted in the US showed that half of Jasmati rice consumers perceived it to be related to the Asian variants of rice.

Bio-piracy worries

Bio-piracy can also be connected to the spreading of genetic resources and traditional information gained and embedded by the indigenous people over time. The past couple of years have witnessed a rise in cases of commercial exploitation and bio-piracy of plants such as turmeric, margosa, basmati rice and hoodia cactus. These issues throw light on the debate of why IPR is beneficial for the local people’s trademarks or GI tagging, where the former could be sold and transferred but the latter is a community right and can’t be transferred to others.

Therefore, increased liberalisation in global trade requires stronger GI and IPR enforcement via various FTAs (Free Trade Agreements) and RTAs (Regional Trading Agreements) for products produced exclusively in specific regions. This will promote peaceful coexistence among ethnic groups and better recognition of local produce, knowledge and cultures.

There is a strong need to protect GI stakeholders from unfair competition. The unique cultural aspects of rural communities associated with GI products need to be part of the branding and promotional activities. Ideally, the consumer of the GI tagged products should be able to associate it with its region of origin and its distinctive characteristics that make it stand out from other products of a similar kind.

Blanket order unwarranted

However, the fact that Scotch, Irish Wishky’s are GI-tagged seems to be “inadvertently missed” or “ignored” when the Government directed to stop purchase of imported spirits and alcoholic beverages across Canteen Stores Department (CSD) stores. The CSD under the directions of the Ministry of Defence, has issued a blanket order restricting the purchase of all foreign imported items, thus impacting sale and purchase of imported spirits and beverages in CSD stores across the country.

Perhaps, there is a need for the government to revisit the subject and make amendments to a faulty order that belies the basic principles of global trade that governments across the world, including India, have accepted. So, while the push for Aatmanirbhar Bharat and Make in India is welcome as it promotes and empowers Indians to become self reliant and provides thrust for greater consumption of indigenous products, we must also respect and work to co-exist with produce that comes with GI-tags or have strong reliance on their country of origin.

The writer is Chief Executive Officer of the International Spirits and Wines Association of India, the representative body of national and international spirits & wine companies having business establishments in India.

Published on October 04, 2021

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