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Mainland China and EU Conclude Negotiations over Landmark Agreement for Protection of Geographical Indications

On 6 November 2019, the European Commission (“Commission”) announced the conclusion of negotiations for a Bilateral Landmark Agreement (“Agreement”) between mainland China and the EU for the reciprocal protection of products with a Geographical Indication (“GI”). According to the Commission, the Agreement is expected to result in mutual trade benefits and demand for high-quality products on both sides.

The World Intellectual Property Organization (“WIPO”) defines a Geographical Indication (“GI”) as “a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin. In order to function as a GI, a sign must identify a product as originating in a given place. In addition, the qualities, characteristics or reputation of the product should be essentially due to the place of origin. Since the qualities depend on the geographical place of production, there is a clear link between the product and its original place of production.” With this definition in mind, Hong Kong traders might be interested in knowing that the scope of the Agreement will protect 100 European GIs in mainland China and 100 Chinese GIs in the EU against imitations and usurpation. 

The Agreement has as background, at least in part, the EU's quality schemes which aim at protecting the names of specific products to promote their unique characteristics, linked to their geographical origin as well as traditional know-how. Similar to the WIPO regime, in the framework of the EU’s quality schemes, product names can be granted a GI protection if they have a specific link to the place where they are made. The GI recognition, it is claimed, enables consumers to trust and distinguish a product’s quality while also assisting producers in the better marketing of their products.

The EU’s quality schemes have, according to the Commission, proven to have great success in the European agricultural industry, with more than 3,300 EU names registered as either a Protected Geographical Indication (PGI) or a Protected Designation of Origin (PDO), two subcategories of GIs. A further 1,250 or so non-EU names are also protected within the EU, mostly because of bilateral agreements, such as the one just negotiated with mainland China. In value terms, the market for EU GIs is estimated to be at around €74.8 billion, and together they account for 15.4% of total EU food and drinks exports.

While still acting as Agriculture and Rural Development Commissioner, Phil Hogan explained that “European [GI] products are renowned across the world for their quality.” Hogan, foreseen as the EU’s next Trade Commissioner, stated that “consumers are willing to pay a higher price, trusting the origin and authenticity of these products, while further rewarding farmers. This Agreement shows our commitment to working closely with our global trading partners such as China. It is a win for both parties, strengthening our trading relationship, benefitting our agricultural and food sectors, and consumers on both sides.”

Mainland China is said to be the second largest destination for EU agri-food exports, reaching €12.8 billion (this figure corresponds to a 12-month period between September 2018 and August 2019). It is also said to be the second largest destination of EU exports of products protected as GI, accounting for 9% of their value, including wines, agri-food products and spirits. As explained by the Commission, the market in mainland China has a high-growth potential for European food and drinks, with a growing middle class that has a taste for iconic, high-quality and genuine European products. The country also has a well-established GI system of its own.

The EU list of GIs to be protected in mainland China includes, amongst others, Cava (a type of sparkling wine produced in Catalunya, Spain), Champagne, Feta (a Greek cheese), Irish whiskey, Münchener Bier (a Munich beer), Ouzo (a dry anise-flavoured Greek spirit), Polska Wódka (Polish Vodka), Porto (a sweet Portuguese wine), Prosciutto di Parma (Italian Parma ham) and Queso Manchego (a Spanish cheese). Among the Chinese products, the list includes Pixian Dou Ban (Pixian Bean Paste), Anji Bai Cha (Anji White Tea), Panjin Da Mi (Panjin rice) and Anqiu Da Jiang (Anqiu Ginger).

Following the conclusion of the negotiations, the Agreement will go through a legal scrutiny process. The European Parliament and the EU Council of ministers will be asked to give their approval. Should there be no delays, the Agreement is expected to enter into force before the end of 2020. Four years after its entry into force, the scope of the Agreement will expand to cover an additional 175 GI product names from both sides. These products will have to follow the same registration procedure as the product names already covered by the scope of protection of the future Agreement. The procedure includes assessments and publication for comments.

Hong Kong traders may like to know that cooperation on GIs between the EU and mainland China began over 10 years ago (in 2006) resulting in the registration and protection of 10 GI product names on both sides in 2012, the starting block for the latest cooperation on this important issue. Furthermore, as a token of the commitment made during the last EU-China Summit in April 2019, the future Agreement is an example of cooperation between the European Union and mainland China, reflecting the openness and adherence of both sides to international rules as a basis for trade relations.

Content provided by Picture: HKTDC Research
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