TCS Daily

Can Americans Make Champagne?

By Roger Bate - September 15, 2003 12:00 AM

CANCUN, Mexico -- Is American champagne as good as French champagne? The traditionalists of all nations will side with the French and no doubt there are connoisseurs on the other side of the fence. But this question may not even be able to be posed in the future if the EU has its way in the WTO. For years the French have correctly explained that there is only one Champagne, the region where traditionally the grapes are grown and turned into the drink. But now they have dubiously demanded that only bubbly wine made in this location can be called 'champagne'.


The Trade Related Aspects of Intellectual Property Rights (TRIPS) Article 22 says that Governments should ensure that labelling of products does not 'mislead or deceive' the public. And the Europeans are concerned that the public associate terms like champagne, feta cheese, parma ham, with the location of production. They claim that producers from other locations are confusing consumers and unfairly making profits from the reputations developed in EU countries. As such they want the EU locations to be given special status under TRIPS of 'geographical indicators'. These GIs would be a form of monopoly rights. In contrast to all other forms of IP, patents, copyright, trademarks, they would be protected in perpetuity.


But the reality is that these names are an accident of history, and the Australian delegation calls the EU arrogant and promoting 'cultural imperialism'.


The Europeans claim that the Doha mandate (from the WTO meeting in November 2001) opened the door to allow GIs into today's discussion. This is a position strenuously denied by many 'new world' producers, led by the US and Australia.

The EU Trade Representative, Pascal Lamy, is pushing a line that has taken hold in Europe. The European Court of Justice recently ruled that domestic Italian makers of parma ham and grana padano cheese had exclusive rights to use the name. The Australian delegation is 'surprised that governments in Europe tolerate what appears to be anti-competitive behavior to protect agricultural producers at the expense of consumers'. But nevertheless, the protectionists in the EU continue to predominate and their acolytes in the rest of the world love the GI idea. Recently the Brazilian Ambassador suggested that a country name in conjunction with a product should be considered a GI (Brazil nuts, thai rice, Colombian coffee etc.).


This farce has to stop. The EU wants a burdensome international register of GIs, to increase the protection of GIs and foist the system on all members of the WTO. In all other systems of IP protection, it is the responsibility of the right owner to protect their rights. But under the system of notification and registration, which European members propose, the costs would be borne by governments. It would be governments that would have the responsibility of challenging or supporting claims for protection and governments which would be forced to implement new legislation. By legislating to give regional agricultural producers monopoly rights, the EU is providing a new form of subsidy, at a time when it is allegedly removing some of its more direct subsidies.


Even if the Doha mandate had opened up the debate on GIs, the costs of GIs are not worth the benefit to the producer interests. The results of allowing them in Europe are already becoming obvious. The recent EU announcements that English words associated with port, such as 'tawny', 'vintage' and 'ruby' must be limited to EU, primarily Portuguese, is just the latest farcical attempt to protect words that have numerous meanings. This builds on the nine year fight within the EU over whether 'feta' cheese was a generic term. Feta is currently listed as a Greek GI and the Danes are seeking to overturn the decision.


Say for a moment that the town of Evian was a GI, which would mean that people in the town could produce bottled water with the name Evian. This would revoke the trademark that the producer of Evian water currently has, which is time-limited, valuable and well protected because of its value. Wilful destruction of trademarks could lead to massive compensation claims and provide absolutely no benefit.


Mind you the new world is not always helping. The Canadians trademarked Parma Ham, obviously upsetting Parma producers in Italy. This needs to stop. Fortunately there are examples of GIs being refused in both EU and Canada, such as the cheese names of camembert, tome, brie, emmenthal and gouda. Simply put, all GIs should be scrubbed. If a French wine grower moves to America, makes champagne and passes it off as French, then he deserves to be censored and fined. But calling his product champagne, when it is produced in an identical way to the way he would produce it in France, should be allowed. Let us hope that Lamy's last-minute push for GIs will fail. The EU has made so few agriculture concessions that their overly-protected producers do not deserve GIs.


TCS Daily Archives