Hard Cheese

Posted on June 26, 2018 in Commercial (Tags: Free Trade Deal, European Union) Commercial image.PNG

The New Zealand Government pursuit of a free trade deal with the European Union (EU) has finally reached a milestone with the official launch of the negotiations on 21 June 2018.  With estimated benefits of $1 to $2 billion for New Zealand’s annual GDP over time and 10% to 22% increase in trade volumes, an EU-NZ free trade agreement (FTA) certainly has the potential to deliver considerable benefit to New Zealand exporters.  Similarly, consumers may benefit from reduced costs of imported European goods such as wine, food, clothing, pharmaceuticals and cars.

 

One of the issues which will need to be faced by the New Zealand negotiators is the insistence by the EU on maintaining protection for geographical indications for certain European products, typically wine, cheese and charcuterie.  This has proved to be the sticking point for other countries seeking FTA deals with the EU such as Australia and Canada.  So what are geographical indications and what is all the fuss about in the FTA context?

 

Geographical indications (GIs) are a collective right.  Typically they are owned by an association of producers or traders situated in a particular region such as a wine growers’ association.  The association registers the GI on a national register (in New Zealand the Geographic Indications Register operated by IPONZ) and once registered, can use the GI to ensure that producers who themselves wish to use the GI are meeting particular production and characteristic requirements relevant to their particular GI.

 

It is expected that this will change following execution of an FTA with the EU.

 

The New Zealand geographical indications regime only permits registrations for wines and spirits.  For example, the FTA between the EU and Korea puts in place a high level of protection for European GIs for:

 

  • Wine eg Champagne, Vinho Verde, Tokagi, and Rioja.
  • Charcuterie eg Prosciutto di Parma, Szegedi Szalámi, and Jambon de Bayonne.
  • Cheese eg Manchego, and Parmigiano Reggiano.
  • Beer eg Bayerisches bier, České pivo.

 

Similarly, after negotiation of the EU-Singapore FTA, existing protection for GIs in Singapore was extended to include provisions for a new GI registry in Singapore and broadening the range of products from wines and spirits to selected categories of agricultural products and food stuffs.  Implementation of an FTA with the EU may also extend to enhanced border enforcement measures.  For example in Singapore, an “interested party” of goods identified by a registered GI may request customs authorities in Singapore to detain suspected infringing goods and restrict the importation or exportation of such goods.  This required allocation of significant resources to enhance the capabilities of Singapore customs authorities. 

 

It is important to note that recognition of international GIs will not necessarily be automatic as a result of an FTA but will still need to be examined by the New Zealand GI Registry.  This might be some sort of middle ground which could be achieved by negotiators.  The New Zealand GI Registry already provides for registration of overseas GIs on a New Zealand register.

 

FTAs inevitably require compromise on both sides but there is no doubt that in the area of IP rights such as GIs, New Zealand is likely to be the party which compromises the most.  Likewise some will be happier than others at the prospect of cheaper European wine and cheese appearing on the supermarket shelves.

 

 

Sally Peart