Geographical Indication – place-linked quality of products

Geographical indication of product quality

Mexican Tequila, Darjeeling Tea, Roquefort cheese, French Champagne, Italian Prosciutto di Parma and Parmigiano-Reggiano (Parmesan) cheese, Ecuadorian Cacao Arriba, Colombian Coffee, South African Rooibos herbal tea, Scotch whisky, Munich beer or Phu Quoc fish sauce from Vietnam. These are all famous examples of origin-linked indication of product quality. Hearing such product names provides an affirmation with customers about trustworthy quality, a long tradition in the production and legal brand protection.

GI links product quality to its geographical origin

Nowadays, consumers are increasingly keen on choosing food produced in traditional ways and attaching higher value to the quality of the food they consume. Such consumers trends can be used for both marketing purposes and for enhancing consumer protection. There are various Quality Infrastructure tools available to pursue these goals. Certification of products that include quality features, including organic certification, are most prominent in this respect. However, a more sophisticated product certification instrument is a Geographical Indication (GI) that links a specific product quality to its geographical origin.

GI is a specific market standard which establishes a “protected designation of origin” (PDO) via product certification. The PDO is a quality feature and a marketing instrument, at the same time. A product of origin-based quality is recognizable by its specific name, referred to as a GI. Origin-linked products distinguish from similar products by their territorial identity and their typicity (a term borrowed from wine tasting). The multiple interactions between local actors and their environment within a specific geographical area characterise such a product for an extended period. These interactions have managed to generate thorough knowledge and developing a distinctive origin-linked quality. Such a product’s quality dimensions are twofold: objective, sensory characteristics of taste, texture and shape, and subjective, identity affirming values and authenticity.

The objective and subjective quality dimensions link to the geography, or the traditional know-how, or both. Based on this context and the historical trajectory, the product shows a distinct quality and identity that cannot be easily copied or counterfeited. The awareness and recognition of this specific product quality by customers (e.g., local consumers, tourists) results in sustainable values (economic, social, environmental, cultural) along a product value chain with all its actors (Barjolle 2013). Brand awareness and recognition are a compelling way to sell product quality by creating a strong competitive advantage.

Registering GI protects competitive advantage

To protect this competitive advantage, GI must be legally registered and certified. GI application in specific markets is often preceded by registering for a trademark in the home country and the targeted export countries. After a while, producer groups or territories might decide to go for even more robust brand protection than trademarks could offer by filing for GI registration. Protecting GI as intellectual property rights (IPR) can be done in many ways, and many countries have developed their legal frameworks to enforce these rights.

GI is a collective right to protect the local producer’s interests. Therefore, local producer associations should implement the pre-registration, registration, and post-registration processes. In this regard, local producers need to agree on product specifications and a code of practice as a quality control mechanism through a participatory approach. This approach makes the GI-scheme a vital tool to professionalize local producer associations’ collective management and provide them with a strong voice to protect their rights. Suppose local producers are in the driver seat. In that case, they can benefit the most from promoting the GI in the market, which can significantly impact local economic development in their location of origin.

For instance, in the European Union, farmers and processors producing traditional or regional specialities often aim at protected GI registrations and designations of origin that must comply with and be certified according to the Council Regulation (EU) No. 1151/2012. The Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement of the World Trade Organization (WTO) define GI as “indications which identify a good as originating in the territory of a [WTO] member, or a region or locality in that territory, where a given quality, reputation or other characteristics of the good is essentially attributable to its geographical origin” (Article 22.1). Strengthening the protection of IPR also has implications for industrial policy. For local firms, it implies both a need to and more substantial incentives to innovate and compete dynamically, while reverse engineering and imitations become less feasible. For external firms, market access through a commercial presence may become more attractive as IPR protection enormously improves through GI (Rodrik, D. 2004).

GI protection is a subject of free trade negotiations

In free-trade agreements between countries, GIs’ bilateral recognition often makes up a separate and essential chapter. For instance, during the negotiations of the EU-Vietnam Free Trade Agreement (EVFTA), which entered into force in 2020, the GI protection was a vital interest of the European Union, as Vietnam represents a large market for SMEs from the EU. The automatic registration and protection of 169 European GIs and 39 Vietnamese GIs are significant provisions of the EVFTA (all GI products are listed in the Annex of the EVFTA agreement). GI owners from the EU expect to benefit from recognition and protection on the Vietnamese market, while Vietnam’s enterprises using their GI brands benefit from protection in the EU market. This is expected to boost foreign investments in Vietnam and to reaffirm European investors on Vietnam’s commitment to protecting foreign GIs. Conversely, GI will represent an important tool to facilitate specific Vietnamese products to the EU market.

In 2001, the Phu Quoc fish sauce was the first product to obtain GI status in Vietnam. In 2013, Phu Quoc fish sauce was granted the European Union Protected Designation of Origin (PDO) status, once again as the first Vietnamese and the first ASEAN product to achieve this recognition. The GI governance structures in Vietnam are different than in most other countries. In Vietnam, the right to register and own GI is held exclusively by the central Government, while a local authority usually has the right to manage. Quality control and inspection happen on three levels: external, internal and producers. External control is implemented by the Control Board, consisting of the Department of Fishery, Department of Agriculture and Rural Development, and three paid experts. The Control Board coordinates with the local department of STAMEQ, the Directorate for Standards, Metrology and Quality of Viet Nam, which is in charge of conducting frequent spot checks and unannounced quality tests. The Phu Quoc Fish Sauce Association looks after internal control and the local producers after self-control against the ‘Specifications of Phu Quoc’ developed by the producer association (Arfini et al., 2019). In the case of Phu Quoc fish sauce, no foreign, accredited certification body is involved.

It is also interesting to look deeper into cases that currently aspire to GI protection and learn about essential preconditions that must be in place. For instance, in Sri Lanka, the Ceylon Cinnamon Value Chain has been identified as one of the country’s first products to receive GI certification. As a precondition, it was recognized that first knowledge gaps need to be closed. The brand recognition of Ceylon Cinnamon among final consumers must be established, and appropriate governance structures for GI among value chain actors created. For the latter, a private sector GI Association for Ceylon Cinnamon has been formed, representing the local producers.

Moreover, geo-referencing land was needed for GI – certifying that a product, due to its geographical origin and production practices (e.g. via Good Agricultural Practices and Good Manufacture Practices), has certain distinct qualities that can manage to attract premium prices. After working on improving these conditions, an initial application for GI registration in the EU market was made in 2017 and published in June 2020. GI of Ceylon Cinnamon will be registered under the Lisbon Agreement at the World Intellectual Property Organization (WIPO) and as PDO or Protected Geographical Indication (PGI) in the European Union. These are the two most critical multinational registries when it comes to global GI protection.

Since 2020, countries are trying to register their GIs under the Geneva Act of the Lisbon Agreement, adopted in May 2015, which allows the international GI registration and appellations of origin through a single registration procedure with WIPO. It also permits access to the Act by specific intergovernmental organizations, including the European Union and the African Intellectual Property Organization (OAPI). The Geneva Act of the Lisbon Agreement entered into force in February 2020.

Close the origin-linked quality virtuous circle

The FAO has published a guide on linking people, products, and places systematically (FAO 2010). The following graphic visualizes the FAO approach to GI.

Source: FAO 2010

The main stages in this so-called origin-linked quality virtuous circle are:

1. Identification: growing local awareness and appreciation of the potential of the product.

2. Product qualification: the establishment of rules for value creation and the preservation of local resources.

3. Product remuneration linked to its marketing and management of the local system.

4. Reproduction of local resources, boosting the sustainability of the system.

5. Public policies providing an institutional framework and possible support for the various stages in the circle

   
   

Conclusion

GI is a strong product standard that helps create a highly competitive advantage, supports branding and marketing of products, preserves traditions and economic, social, environmental and cultural values and sustains the production of a specific product, its quality, and its availability the resources required for producing it. There are various ways to file for GI: on national markets through laws and regulations or with multilateral organizations, such as the EU or the WTO aiming at legal protection in many countries at once. A variety of preconditions must be in place to achieve GI. The FAO has published a guide for promoting quality that originates in its links to a territory. The guide helps to systematically prepare for GI registration to have all conditions met and to register at home and on foreign markets successfully. There is a debate on how far GIs represent barriers to trade for developing countries and developed countries, e.g. the EU and the US. We will look into this debate in more detail in a future blog post.

References

Arfini, F., Bellassen, V. 2019. Sustainability of European Food Quality Schemes: Multi-Performance and Governance of PDO, PGI. January 2019.

Barjolle, D. 2013. Ceylon Cinnamon. A roadmap towards its protection as Geographical Indication. FAO contribution to the project STDF lead by UNIDO. Standard and Trade Development Facility (STDF). June 2013

FAO 2010. Linking people, products and places. A guide for promoting quality linked to geographical origin and sustainable Geographical Indications, Second edition, Rome

FAO. 2012. Identification of origin-linked products and their potential for development: A methodology for participatory inventories. Rome

Rodrik, Dani. 2004, Industrial Policy for the Twenty-First Century, Centre for Economic Policy Research (CEPR), London

Sautier, Denis. 2019: Maintaining and Controlling Mechanism of Registered GI, Presentation, 20/09/2019, Hanoi

WIPO 2015, Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications, Geneva