European Council authorises signature of the EU-China agreement on geographical indications

On 20 July 2020, the European Council announced its decision on the agreement between the EU and China on Geographical Indications (GIs).

Mr Wang Wenbin, spokesperson of the Ministry of Foreign Affairs, welcomed the European Council’s decision two days later in the regular press conference and stated that China had also completed the internal procedures for the ratification:
This is China's first comprehensive, high-level bilateral agreement on GIs, and the first major trade agreement between China and the EU in recent years. It is a monumental agreement that will deepen trade cooperation, deliver greater benefits to Chinese and European people, and demonstrate the Chinese government's resolve in advancing high-level opening up and the protection of IPRs.



As the image above from the European Commission’s Twitter shows, the agreement ensures that 100 EU agri-food GIs and 100 Chinese agri-food GIs will get mutual strong protection on each other's internal markets.

The full text of the agreement is published here. In particular, ANNEX III (pp. 29–42) and ANNEX IV (pp. 43–55) list the 100 protected GIs originating in China and the 100 protected GIs originating in the EU, respectively, both with the standard translations provided.

Article 4 defines the scope of protection provided to the selected GIs; Article 4.1(b) is especially worth noting, as it discusses going the extra mile in furthering the protection of the GIs:
…[A]ny use of a geographical indication identifying an identical or similar product not originating in the place indicated by the geographical indication in question, even where the true origin of the goods is indicated or the geographical indication is used in translation, transcription or transliteration, or accompanied by expressions such as “kind”, “type”, “style”, “imitation” or the like; (emphasis added) 
This dialogue of the EU-China cooperation on GIs was opened back in September 2010. The latest concrete result was the completion of the ‘10 plus 10’ project in 2012, which provided mutual protection on 20 agriculture GIs in total, ten within each other’s territories. This time, the ‘100 plus 100 in 2020’ is a major step forward.

The EU-China agri-food trade has been remarkable. A Commission report showed that China was the second destination of exports of EU agri-food products from September 2018 to August 2019, reaching €12.8 billion; it was also the second destination of EU exports of products protected as GIs (accounting for 9% of its value), including wines, agri-food products and spirit drinks. In June 2020, the agri-food monitor observed that ‘the COVID-19 outbreak did not appear to impact the EU’s agri-food exports to China, as monthly values rose by €291 million compared to February 2019.’

The Chinese market is known as a high-growth market, surely no exception for exotic food and drinks. To quote Agriculture and Rural Development Commissioner Phil Hogan: ‘Consumers are willing to pay a higher price, trusting the origin and authenticity of these products, while further rewarding farmers.’ It is noted that this is particularly the case for those who ‘have a taste for iconic, high-quality and genuine European products’.

This high-level cooperation is good news for foodies. For instance, when craving some Salamini Italiani alla Cacciatora or Pu'er Cha (普洱茶), people can now save themselves the trouble of guessing which product is actually from the specific geographic area they want by spotting the official GI symbol.

In addition, the range of products to choose from will greatly increase because the two markets produce different GI products well. According to the Agreement Annexes, 72 out of the 100 EU GIs are alcoholic beverages, while 28 of the 100 Chinese GIs are teas. It seems that this mechanism based on equality and exchange of needed goods will be able to drive the bilateral GI-related trades, which will benefit many, including producers, agri-traders and consumers on both sides.

The agreement is not signed yet; place and time are still to be determined. Four years after it is put into place, an additional 175 GI names from both sides will be covered.

In the meantime, this Kat believes smoother cooperation could be achieved if the established domestic GI system in China was further simplified and explained properly. Efforts have been made in recent years: the 2018 State Council Institutional Reform made adjustments to the former three competent authorities and appointed the National IP Administration (CNIPA) as the only central GI administration; the CNIPA issued the Measures for the Administration of the Use of Special Marks for GIs (for Trial Implementation) on 3 April 2020, which marked a new chapter of the GI system in China. To date, there are still problems in the lack of substantive unity in the GI administration and the systematic standards of reviewing.

Furthermore, if the value of GIs and the pertinent criteria that the standard-setters hold can be better understood by a much broader audience, GIs' benefits to society are more likely to be fully exploited.
European Council authorises signature of the EU-China agreement on geographical indications European Council authorises signature of the EU-China agreement on geographical indications Reviewed by Tian Lu on Tuesday, July 28, 2020 Rating: 5

3 comments:

  1. François GRIESMAR (Siglex France)Tuesday, 28 July 2020 at 19:30:00 BST

    Part 1

    Even if my professional practice deals most of the time with TMs, Designs and copyright, I am “sensitive” as regards “Appellations of origin” and all other related rights (in particular EU PDOs and PGIs). Moreover, I note that often even highly qualified lawyers do not take into account economic issues, whereas the content of laws in general and of treaties in particular depends, sometimes considerably, from power balance, in particular in the business field. One cannot understand the basic underlying issues in the absence of any such light.

    This particularly the case as regards this type of treaties and I have therefore many remarks concerning this China-EU Agreement on GIs.


    1 – Do we speak of Protected designation of origin (PDO) or of Protected geographical indications (PGI)?

    Each of these expressions corresponds to a well-defined set of rules and a range of corresponding products. However, in the Agreement and in the IPKat’s comment, it is only referred to “geographical indications”, which is not correct if one reads Annex IV enumerating the “geographical indications” covered by this Agreement : for example, most of the enumerated French “geographical indications” are actually PDOs (“Champagne”, “Médoc”, “Comté”, etc.) but “Pruneaux d’Agen” is a PGI. And this seems to be the case of many products from other EU member States cited in this Annex IV.

    Thus, there is total confusion here and explanations are highly necessary. But this is not the main issue.


    2 – China-EU Agreement on “GIs”: is there a real balance?

    2.1 – In many EU member States PDOs – and, to a lesser extent GIs – are an old and strong “industry”

    In certain EU member States, in particular France, PDOs have been existing often for decades. In France, the “AOC” [equivalent of PDA] legislation dates back to 1935, including the creation of a specialised administration, the “Institut national des appellations d'origine”(INAO) which still plays a very important role. Eventually, a certain number of European countries have based their controlled place name systems on the French AOC classification.

    Inter alia, there are currently,
    - 3716 EU PDOs and PGIs, among which 1611 on the wine register (source: https://ec.europa.eu/info/food-farming-fisheries/food-safety-and-quality/certification/quality-labels/geographical-indications-register/);
    - more than 171 cheeses, butters and creams from EU member States benefitting from the EU PDO label: among them, there are 50 from France and 51 from Italy.

    2.2 – In China a recent legislation and probably a limited importance for the Chinese “GIs”

    From a synthesis on Chinese legislation on GIs dated February 2011 (https://www.vsnews.fr/images/etudes/QA_Manual_Chinese_legislation_on_GIs1012.pdf), I understand that the first laws on GIs date back only to 1982. Unfortunately, this document apparently does not contain information regarding the actual number of registered Chinese GIs nor about the economic importance of the products protected by this legislation.

    From a 2016 WIPO document, I understand that 7416 GIs of domestic (= Chinese) origin are in force in China in 2016: this would mean that within 34 years, China protected twice as many GIs than the EU until 2016 (3356), reminding the “strong seniority” of many PDOs in major EU member States; knowing the time and the considerable work (in-depth studies, consultations, negotiations, etc.) to create a PDO in Europe, one can wonder if we speak of the same rights in practice…



    François GRIESMAR
    Siglex France

    ReplyDelete
  2. François GRIESMAR (Siglex France)Tuesday, 28 July 2020 at 19:31:00 BST

    Part 2


    2.3 – What is the business issue for each partner of the Agreement?

    Export of European (= from EU member States) GI- (= PDO + PGI) labelled products in China is a matter of € 12.8 billion (as stated by the EU Commission report you cite in your paper) and this is certainly much more than the turnover corresponding to the export to the EU of Chinese GI-labelled products.

    Besides, even if there are “leaders” (such as Bordeaux or Cognac) among the EU GI-labelled products sold in China, this business is composed of at least several hundreds different GIs. Are the Chinese GI-labelled products sold in the EU also “split” between so many different GIs or do a few dozens of these GIs represent most of the business?

    Only a clear knowledge of these facts combined with the few elements mentioned in § 2 above can enable to seriously evaluate the practical and business consequences of this Agreement. For example, by obtaining a protection for 100 Chinese GIs, does China secure in practice most of its GI-labelled products export business with the EU? On the other hand, obtaining a protection for 100 (or even 175) EU GIs is obviously far from securing most of the EU “GI exports” in China. If the preceding hypothesis are correct, one should not be optimistic as regards the protection of more EU GIs in China…

    One might state that the preceding is “business speculation” rather than legal thinking. Yes and no: because if one cannot assess the actual business impact of this China-Eu Agreement on GIs, it can be feared that the comments will remain theoretical legal writing, even risking to be viewed as a paraphrase of the self-congratulation speeches made by the EU representatives, which is their role. In other words, we need critical thinking in this matter… which drives back to business issues.


    François GRIESMAR
    Siglex France

    ReplyDelete
  3. Hey Mr François GRIESMAR,

    Thanks for your informative and thought-provoking comments 👏

    ReplyDelete

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