CHAMPAGNE, Switzerland (Reuters) - The little Swiss village of Champagne, whose name dates back to the ninth century, has been producing wine for at least 350 years.
But in a bizarre twist to a row that threatens to derail a new global trade agreement, the villagers are unable to label their wine Champagne.
That is reserved for the sparkling wine produced in the French region of the same name — a right so jealously guarded that France even inserted it into the Treaty of Versailles that ended World War One.
“In this village we no longer have the right to use our own name,” said Thomas Bindschedler, spokesman of the Swiss village action committee. “In a market where consumers are increasingly concerned with the accountability of producers, that is fatal.”
Differences between World Trade Organisation (WTO) members about the rules for such names or “geographical indications” (GIs) now risk blocking an outline deal in the long-running Doha round of trade talks at a hoped-for meeting of ministers on a date to be set for the coming weeks.
In Europe many wines, and some foods such as cheeses, are associated with a particular region or “terroir,” where climatic or soil conditions and traditional working methods can lend the product a special quality.
Many countries protect the names, or appellations, of these regions as a brand, whose abuse could mislead consumers.
The Doha round includes drawing up a register of wines and spirits where regional names such as Champagne and those of drinks specifically linked to one country, like Mexico’s tequila, would be strictly protected.
The European Union and Switzerland want to extend this register to other products, but many countries are resisting. All in all, “Friends of GIs” amount to about one third of the WTO’s 151 members, including the 27 EU states.
For negotiators from Brussels, a Doha deal without tough protection for geographical indications is unthinkable.
The issue is particularly important for food producers in southern EU states such as Italy and Spain.
Italy is determined not to see its quality olive oils and cheeses suffer the same fate as its prosciutto ham from Parma.
The word “Parma” was trademarked in 1971 by a Canadian firm, and Italian exporters are not allowed to sell prosciutto in Canada under the Parma name.
Not all EU producers are bothered.
Britain and the Netherlands, makers of well-known cheeses such as Cheddar and Gouda, are not seeking protection.
But the EU as a whole, and Switzerland — both big food importers which are being asked to open up their markets in the Doha round — want compensating gains to show their farmers.
“We cannot pay the maximum bill in agriculture without having something in return,” said Luzius Wasescha, Switzerland’s ambassador to the WTO.
It is not just a question of regional identity and pride.
Both the EU and Switzerland want their farmers to grow more premium products. And Wasescha points out that the regional names, like any brand, have commercial value.
This is shown in the way the Swiss farmers who produce Etivaz cheese, made traditionally by leading cows up to Alpine pastures every summer where they graze on meadows of rich grass, wild flowers and herbs, can sell their milk for double the normal price, at 1 Swiss franc ($1) a liter, Wasescha said.
So at a proposed meeting of ministers to lay the ground for cuts in tariffs and subsidies for agricultural and industrial goods — and set signals to liberalize the services sector — Brussels and Berne are insisting guidance on appellations must also be agreed.
“The liberalization of agriculture trade should not result in wider abuses of geographical indications, and measures to improve their protection are necessary,” said Sergio Balibrea, EU spokesman in Geneva.
“Therefore, the EU needs the key political parameters governing both further agriculture liberalization and further GI protection to be agreed at the same time.”
Several developing countries also support GI extension.
Thailand produces high-quality rice, and India produces valuable rice and tea, which they would like to see protected.
Brazil is willing to back the EU, in return for its support on a set of intellectual property measures to prevent western companies patenting products that draw on indigenous plants or folk wisdom in developing countries without disclosing their origin and sharing the benefits.
The EU says it is not trying to claw back names that have already been lost to trademarks or generic use.
But many new world countries — ranging from the Americas to Australasia — are wary of agreeing to the EU’s approach.
They fear the EU could simply place a regional product on a GI register, and the onus would be on producers in other countries who use a similar name to justify it.
They point to the situation in the EU, where Denmark, the biggest producer of feta cheese, was unable to continue using the name after a court ruled in 2005 it was a protected designation of origin for Greece. Now EU feta producers besides Greece must call their product something like “white cheese from sheep’s milk in brine” which doesn’t have the same ring.
New world countries, many of which inherited European food and place names from European colonists, argue that their existing systems of copyright provide effective protection and a register is not needed.
So while parmesan in Australia is a generic name for a hard cheese you grate on to pasta, Parmigiano Reggiano is the protected Italian version of that cheese.
As a result it will be difficult to get ministers to agree at the forthcoming meeting, unless the EU agrees to something less strict on the register of protected names or more concessions in agriculture, trade diplomats say.
But negotiating GI registers and trademarks is much harder than negotiating tariffs and subsidies.
“You can split a tariff. I say 20, you say 30, we agree 25,” said one new world diplomat, speaking on condition of anonymity because she is unauthorized to talk to the press. “You can’t split the difference on intellectual property systems. You can’t horse-trade.”
Meanwhile, back in Champagne (Switzerland), the villagers are outraged by a French court ruling from April 9 banning the village baker from using the name “Champagne” in its packaging on biscuits and other products sold in France. The baker intends to appeal.
In fact WTO rules do allow the villagers to use their name: it is genuinely theirs, and they are not trying to pass themselves off as makers of French sparkling wine.
The rules protect producers who have developed reputable products in a given region from unfair competition by producers outside that region using the name to mislead consumers.
But the Champagne issue is not clear-cut. The Swiss government in bilateral talks with the EU agreed that Champagne should be limited to the French producers in exchange for landing rights for the Swiss national airline in the EU.
Editing by Sara Ledwith