The EU has been hit by the news that a WTO dispute panel has made a ruling against aspects of its scheme for the protection of geographical indications (GIs). The significance of this decision goes beyond preserving the integrity of terms such as Feta cheese and Parma ham. In our recent book (Coleman, Grant and Josling) on Agriculture in the New Global Economy published by Edward Elgar, GIs were given a central place in what we described as the 'multifunctional' paradigm of the agricultural economy.
The production of quality, specialised products for sale in internal and external niche markets is an increasingly important part of the EU food economy that can help to sustain farm incomes in a more liberal trade environment. Supporters of multifunctionality see scope for the recognition of GIs as signs of quality that deserve to be protected and nurtured in many parts of the world. They see WTO action on GIs as an essential offset for permitting more liberalised trade of agricultural commodities.
However, countries such as Australia and the US see the system of GIs as an attempt to monopolise terms which they see as semi-generic such as 'champagne'. The US argues that the EU system discriminates against well-known US GIs such as Idaho potatoes and Florida orange juice. The EU insists that its system does not prevent the registration of GIs from third countries - although no one has ever bothered trying.
The WTO panel concluded that EU regulation 2081/92, which requires other WTO members to offer the same level of protection for GIs as that set out under EU law in order to receive protection for their marks in Europe, violates the WTO's national treatment rules.
Mine's a Bud
The finding could have implications for the long-standing battle between well-known US-based brewing firm Anheuser Busch and the Czech brewer Budjejovicky Budvar for the rights to the 'Budweiser' and 'Bud' beer brand names. Budweis is the former German name for Ceske Budejovice where Budvar is based. When the Czech Republic joined the EU it secured GI registration for three names and is arguing in the court that it can use these names in translation
Perhaps wisely, the European Court of Justice has refused to get caught up in the row, ruling that it was up to the Finnish courts to resolve a legal fight in that country about whether the Czech firm could use the 'Budweiser' name.