Media  Global Economy  2014.11.26

Branding crops and Geographical indication

English translated version of "Business Prospect" on NHK Radio Channel 1 on September 16, 2014

1.What is "geographical indication"?

It is easier to understand "geographical indication" if I explain it with specific examples rather than with a legal definition. Specific crops are related to specific production centres. For example, Bordeaux wine is produced in the Bordeaux area. It may be possible to make wine of the same quality as Bordeaux if you grow the vine in a climate similar to Bordeaux and make the wine by a similar process. However, to protect brands like Bordeaux wine which have acquired brand value over time, the concept of "geographical indication" has been approved by the WTO (World Trade Organization). This is for products in which the quality and reputation are closely associated to the production centre or areas with a long history of producing the product so to avoid products from other areas trading on the name. Of course, not all of the wine produced in Bordeaux is allowed to be named Bordeaux. There is a condition that the wine has to be made under a certain process. Other products that have a geographical indication include Champagne, Cognac, Parma ham, and Parmesan cheese.

Names that are close to and that could be easily confused with brands with a geographical indication are not allowed. On the other hand, even if the brand name with a geographical indication is used, it is not violation of the agreements in WTO as long as consumers can easily recognize the production centre. For example, cheese produced in Hokkaido can be called "Parmesan cheese" if its production area is shown in such a clear way as "Parmesan cheese produced in Hokkaido."

However, the WTO strictly protects geographical indication for wine and spirits at the strong insistence of the EU during the Uruguay Round negotiations. Even if a production centre is shown clearly the name "Bordeaux" is not allowed to be used. For example "Bordeaux wine produced in Japan" would not be allowed.

2.Are there any examples of name changes due to the WTO agreement?

Champagne is one example. Champagne is produced in the Champagne area of France, but similar wines have been produced all over the world. After the agreement of the WTO, sparkling wine is used as the name for wines similar to champagne which were not produced in the Champagne area.

3.I can imagine there would be resistance in areas that have to change the names of their products.

Exactly. The EU, which wants to use branding to increase added value of crops, is enthusiastic about promoting geographical indication. Within the EU, however, there are different ideas concerning geographical indication. Even if the name is related to a specific area, it is not protected in cases where the name has already been used in various areas and consequently has been recognised to be a generic name. There is often argument over whether the name has become generic or not.

This is particularly true of cheese. There is a cheese named "Camembert" which is originally from France. In this case, because of the strong insistence of Denmark who had been using the name, "Camembert" was judged a generic name. France accepted "Camembert de Normandie," that is Camembert produced in the Normandy area, as its geographical indication to be protected. On the other hand, Parmesan cheese produced in Italy and Feta cheese produced in Greece were eventually judged as worthy of geographical indication in spite of disagreement within the EU.

4.Do more difficult problems occur when several countries are involved?

Yes. Especially in cases where, for example, immigrants from Europe to the US or Australia become producers and call crops by European names. The US does not accept "Parmesan" and "Feta" as geographical indications but considers them as generic names.

At the present, there are negotiations between US and EU on a free trade agreement. Both sides have changed their methods of protecting their agricultural sector from fixing prices to a direct subsidy from public finances. Unlike Japan, prices in their countries are almost same as the international prices so customs duties are not an issue for them. Instead, the acceptance of geographical indications is the big issue in the negotiations. In this case, the EU is assertive; the US, conservative.

The US concluded an agreement with the EU in 2006 concerning wine and agreed to the free use of names, like Champagne, which had been used up to that time. However, recently the EU has been negotiating a new free trade agreement that would stop producers outside such regions using these names. The US government objects to this, but producers in the US who have established their products as a regional brand, such as Napa Valley, think geographical indications should be accepted. They say that products named "Valley Napa" which is a reversal of the name "Napa Valley" are in circulation in China - a kind of pirated goods. Another example is motorcycles made in China sold as "Honta," not "Honda."

5.What is Japan's attitude toward "geographical indication"?

As for the alcoholic drinks, Iki and Ryukyu, types of Japanese shochu spirits, and Hakusan, a kind of sake, are accepted as geographical indication products based on a law established in 1994. However the Japanese government was initially against geographical indication for agricultural products because there were already Japanese products named "Camembert" and so on in existence. Although a new law "a law to protect specific names of products of agriculture, forestry and fisheries," commonly known as the geographical indication law was enacted in order to promote brand crops and increase their added value. The Japanese government, like the EU, took a more positive attitude towards "geographical indication" in order to promote branded crops.

(This article was translated from the Japanese transcript of Mr. Yamashita's speech in the "Business Prospect" session of the radio program "First in the Morning News" broadcast by NHK Radio Channel1 on September 16, 2014.)