7th May 2003

TRIPS COUNCIL: GI EXTENSION ISSUE CROPS UP IN NEGOTIATIONS ON MULTILATERAL SYSTEM

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During its special session from 29-30 April, the Council for Trade- related Aspects of Intellectual Property Rights (TRIPs) continued negotiations on the establishment of a multilateral register of geographical indications (GIs) for wines and spirits, based on a first draft text circulated by TRIPs Council Chair Ambassador Eui-yong Chung of Korea on 16 April. The contentious implementation issue of whether the higher level of protection awarded to wines and spirits should be extended to other GIs arose for the first time in the negotiations, sparked by Bulgaria and supported by a number of other countries.

Geographical indications, as defined in the WTO TRIPs Agreement, are identifications of the country or region where the quality, reputation or other characteristic of a product is essentially attributable to the geographical region. Additional protection of GIs already exists for wines and spirits (e.g. Champagne, Bordeaux and Cognac), and some countries (mainly Asia, Europe and Africa) are calling for this protection to be extended to other products (e.g. Basmati rice, Darjeeling tea or Camembert cheese). In the Doha Declaration, Members agreed to finalise negotiations on a multilateral system of GIs for wines and spirits by the Fifth WTO Ministerial Conference, to be held in September 2003.

Chair’s text reflects divergent positions

Members’ views on the draft text followed the usual positions, which also found reflection in the text itself in the form of various options (labelled A, B and B1 and B2). Option A presented the views of countries such as the US, Canada, Australia, Chile, Argentina, Japan and others, who are seeking a non-binding system that does not require Members to protect registered terms. Rather, the register would function as a database that could be consulted by a Member “when making decisions regarding recognition and protection of geographical indications for wines and spirits”. Non-participating Members “shall be encouraged, but shall not be obliged” to use the system as an information source.

In contrast, the European countries favour Option B, which would allow Members to challenge proposed registrations and would require registered terms to be protected in all WTO Member countries, including non-participating Members. This Option is further differentiated into B1 proposed by the EU, which envisages bilateral consultations in case of a challenge, and B2 proposed by Hungary and supported by Switzerland, which suggests settling unresolved challenges by arbitration.

Hong Kong, China submitted a compromise proposal aimed at providing an “alternative model” for establishing the multilateral system (TN/IP/W/8, available at http://docsonline.wto.org/). The paper proposed leaving the protection to be determined at the domestic level (along the lines of Option A), which the EU and others criticised as too “voluntary”. Supporters of Option A were generally more favourable, but expressed concerns about certain details, including a suggestion to consider registration in the system as “prima facie” evidence in a Member’s domestic legal system. The submission included an estimate of the registration costs, which are expected to amount to USD 180 per term.

Bulgaria raises GI extension issue

For the first time in the negotiations, Bulgaria brought up the issue of GI extensions when suggesting to replace all references to “wines and spirits” in the draft text with products “protected under Article 23 of the TRIPs Agreement”. This wording, which was supported by the EU, Switzerland, Kenya, India, Thailand and others, would allow the multilateral system to be expanded to include products other than wines and spirits should Members agree to expand the higher level of protection under Article 23. Opponents of GI extension, including the US, Australia, Chile and others, strongly opposed the proposal, arguing that it would go beyond the mandate for negotiations (Article 23.4 of the TRIPs Agreement and Article 18 of the Doha Declaration). Discussions on GI extension continue to deeply divide WTO Members in the TRIPs Council where countries differ on whether to begin negotiations on this issue (see BRIDGES Weekly, 25 September 2002).

Australia concerned over registration of ‘traditional expressions’

Among the contentious issues were concerns raised by Australia that the EU might attempt to register “traditional expressions” in the multilateral system, such as “ruby”, “tawny” or “vintage”. The concerns were, inter alia, based on previous legislative efforts by the EU to protect such expressions, according to Australia (see BRIDGES Weekly, 3 July 2002, http://www.ictsd.org/weekly/02-07-03/story4.htm). Australia called on Members to officially agree that such expressions “are not intellectual property” and that “no claim would be made during or after the negotiations” that they meet the definition of GIs. In a communication submitted to the TRIPs Council, the EU reiterated a previous statement that traditional expressions “could never be in the multilateral register”.

Pressure on EU mounts over its GI rules

Australia has requested consultations with the EU over it system of protecting GIs, alleging that the EU system violated the WTO Agreement on Technical Barriers to Trade (TBT) and the TRIPs Agreement as it discriminated against non-EU products and undermined exclusive rights to trademarks. Australia also joined the US complaint against the EU system as a third party. The US had updated a three-year old WTO complaint on 5 April, arguing that the EU system violated the national treatment and most favoured nation obligations of the General Agreement on Tariffs and Trade (GATT) and the TRIPs Agreement. In the press release announcing the complaint, the US explicitly highlighted the issue of GI extension, noting that “the EU is currently pressing for additional protection for EU geographical indications in the Doha Development Agenda while at the same time failing to meet its existing WTO obligations to protect GIs of other WTO Members”.

The next and last (scheduled) special session of the TRIPs Council is set for 2-3 July. The Chair is expected to hold informal consultations in the upcoming weeks in an effort to compile a single text without options by the July meeting.

The Chair’s text is available at http://www.iprsonline.org/ictsd/docs/wto_JOB0375.pdf. Submissions to the special session are searchable at http://docsonline.wto.org/ using the document symbol TN/IP/W/*.

ICTSD reporting.