NZ walking GI tightrope

Europe wants to expand legal protections of names for food and beverages synonymous with regions beyond its own borders. Will New Zealand play ball? reports.

Parmesan, Gruyere and Feta are all examples of cheeses originating from the regions in Europe which bear their name.

Under European law they are recognised as having distinctive qualities derived from the soils, climate and traditional methods of the regions in which they were first made.

They are protected by a system of Geographic Indications (GIs) which bars products bearing the same name from entering the European Union from outside its borders.

Fonterra for example cannot sell Parmesan, Gruyere, or Feta to the EU, although it is free to sell them largely unrestricted elsewhere.

Historically, opposition to the protection of names via GIs has been led by the United States and Australia — which challenged the EU’s registration system at the World Trade Organisation in the early 1990s — and New Zealand.

These countries argue that most of the EU’s registered GIs had long since passed into common or generic use and should not be exclusively claimed by European producers or anyone else.

Fair trading laws or trademarks, they argue, should be enough to deter those seeking to pass off their products as something, or from somewhere, they were not.

A former Fonterra executive told the Herald the EU’s approach amounted to a land-grab.

“This is old bloody colonial attitudes all right. That doesn’t come through very often but politically that is what it is . . . we have these things, stuff you.”

But could priorities be changing for New Zealand as its producers develop their own appellations in need of protection?

This month the Government will finally enact the Geographical Indications (Wines and Spirits) Registration Act.

First drafted in the mid-2000s to sidestep EU threats against New Zealand wine exports, the legislation originally went nowhere “largely because of a lack of interest from NZ producers”, according a 2014 Cabinet paper.

Separately negotiated export protocols overcame the EU threat. The legislation to prevent the names of NZ regional wines from being passed off in their own backyard gathered dust for the best part of a decade.

In the interim, New Zealand wine exports surged from $303 million to $1.3 billion annually. Suddenly the cache of names such as Marlborough sauvignon blanc and Central Otago pinot noir was on the rise among international wine drinkers.

“This makes NZ wines more susceptible to counterfeiting and passing off, and strengthens the case for tools to protect intellectual property rights,” the 2014 cabinet paper said.

With that in mind, Jeffrey Clarke, NZ Winegrowers’ general counsel, says the industry swung in behind.

Having its own domestic GI register was seen as a “pre-requisite” for New Zealand getting its own GIs recognised in the EU and China.

Without that recognition, New Zealand producers would find it difficult to get a remedy under fair trading or consumer protection laws in those countries.

Says Clarke: “If you do not have a GI registered, you might have to provide evidence that ‘ yes, Hawkes Bay was a wine region and it had a history’, and, ‘yes, we export wine to China’.

“Once you are registered it is like: we have a GI registration — case closed.”

Later this year New Zealand is expected to begin long-awaited talks for a free trade deal with the EU.

If the EU’s negotiating stance with other countries is any guide, we can expect to come under intense pressure to acknowledge European GIs in this country.

One dairy industry source said that in recent years, the EU had been allowed a free hand by countries in Asia and Latin America. A sensible negotiating strategy for the countries negotiating with the EU perhaps, but damaging for dairy exporters like New Zealand, which faced being cut out of those markets in favour of GIprotected European rivals.

“In most countries it doesn’t matter enough to them to push back on,” says Clarke. “The Europeans meanwhile just push harder because it matters to them and they get a large amount of what they want.”

Fonterra’s director of global stakeholder affairs, Philip Turner, says the dairy industry believed it was important New Zealand took a stand in the upcoming talks with the EU.

Though the proportion of the NZ industry’s production that was accounted for by GIs was relatively small, Turner says it is wary of the “creeping” nature of the EU’s agenda. Give way on niche names like Camembert and Brie and before long it could find itself fighting to retain the use of Cheddar and Edam.

“People are just listing every name they can think of on the basis that they think it will be useful to their producers,” explains Turner.

He says the local industry had asked the Europeans to “draw a line in the sand” on GIs and produce a definitive list, but had been rebuffed. “That makes me suspicious.”

Which all leaves New Zealand in an interesting position when trade talks with the EU kick off later this year.

Can our negotiators argue for GI protection for Marlborough sauvignon blanc in the EU at the same time as resisting demands for the same treatment for Italian parmesan here?

Former top trade negotiator Crawford Falconer believes New Zealand can maintain both positions.

“We have come to the view that it is sort of okay to acknowledge GIs as something distinct from trademarks. But the test we apply is whether it is generic or not and by that standard most of the ones we are interested in are GIs and some of the ones the Europeans want are not.”

But it is a negotiation — and how much New Zealand gives up in the end will come down to what it can get in return.

“You are not going to feel serious pressure to give in to the EU on GIs if you get a crappy deal on access to their market for beef and butter,” says Falconer.

“But if you get a moderately good deal, then it becomes a possibility.”