After more than two and a half years of talks, the EU and Singapore have concluded negotiations on a free trade agreement (FTA). Singapore has agreed to establish a register of regionally-specific and recognized foodstuffs, wine and spirits known in the EU as geographical indications. The EU has tried for over 20 years to gain acceptance of the concept in trading relationships.
The agreement would offer a high level of protection to what the EU considers its most valuable geographical indications such as Bordeaux wine and Parma ham. U.S. and other third-country suppliers would be restricted in how they could identify products that have been traded in Singapore for years.
This is particularly important in Singapore where there is open competition from third-country producers, particularly for meat and dairy products. Singapore is a unique market with a land area about 3.5 times the size of Washington, DC, 5.4 million people considered 100 percent urban and a per capita GDP in 2011 of U.S. $59,700 on a purchasing power parity basis, the fifth highest in the world. About 1.5 percent of the land is arable, another 1.5 percent is in permanent crops and the other 97 percent is considered non agricultural. Singapore is a focal point for Southeast Asian sea routes and accessible for every country in the world. The U.S. and Singapore have had a FTA since 2004.
When the government of Singapore negotiated the FTA with the EU, the interests of domestic agricultural producers were not something to worry about. The government’s goal is to make Singapore a major world financial center and high-tech industry leader. The EU is Singapore’s biggest export market, and Singapore is the EU’s largest trading partner in Southeast Asia. Singapore has major investments in pharmaceuticals and medical technology production. The agreement has a high level of intellectual property rights (IPR) protection to encourage innovation. The geographical indications for foodstuff are considered to be part of the IPR framework in the agreement. The EU already has a FTA with South Korea which has been in place since July of 2011 and has language on geographical indications that restricts imports of some types of cheese.
The Singapore agreement is the first one for the EU with a member of the ten-nation Association of Southeast Asian Nations (ASEAN). Negotiations have begun with Malaysia and Vietnam and preparatory talks are ongoing with other ASEAN countries. The three countries are also members of the 11 countries, including the U.S., negotiating the Trans-Pacific Partnership (TPP) FTA. The U.S. government has already proposed language in the talks that would limit the use of geographical indications. New Zealand and Australia are expected to support U.S. efforts.
The U.S. Agricultural Attaché estimates Singaporean agricultural commodity and food imports at U.S. $12.1 billion in 2011, including products re-exported to other countries. Imports from the U.S. were estimated at U.S. $650 million by the Foreign Agricultural Service of USDA, 6-7 percent of the total market including transportation costs. Beverages account for 20 percent of imports, dairy products 12 percent, meat and poultry 7 percent and processed fish and meat 4 percent.
Affected U.S. industries have responded to the EU effort by establishing the Consortium for Common Food Names, a Washington, DC based international initiative to preserve the right to use common food names. The Consortium supports geographical indications associated with specialized foods from regions throughout the world, but opposes any attempt to monopolize common (generic) names that have become part of the public domain. It seeks to foster the adoption of an appropriate model for protecting both legitimate geographical indications and generic food names.
The Consortium has guidelines it believes can be helpful in establishing a ‘fair’ model that protects common names and legitimate food-related geographical indications. A geographical indication should include the name of the region or sub-region where the product is produced and a second term that describes the product such as ‘Idaho Potatoes’. It should maintain a strong tie to the full original geographical indication by protecting the term only in its original language and in transliteration like ‘Parmigiano Reggiano’. Reference points would be established for identifying common names, such as existence of a Codex standard or other international standards; use of the term in dictionaries, product descriptions in tariff schedules; etc. The process should provide opportunities for stakeholders around the world to comment on geographical indication applications to ensure consideration of the impact on other farmers and food producers.
A Geneva, Switzerland based organization, the Organization for an International Geographical Indications Network (oriGIn), supports the EU approach on the issue. It claims to represent 350 producer groups in 40 countries.
The debate will likely become more intense in the U.S. shortly. Officials of the U.S. and EU High-Level Working Group appointed in November 2011 by U.S. President Obama and EU Commission President Barosso to explore ways to more closely align the world’s two largest economies are expected to issue a report by the end of January calling for negotiations on an U.S.-EU FTA. The EU will undoubtedly insist that geographical indications be among the issues addressed. Canada and the EU are in the final stages of talks on a FTA and whatever is agreed to may indicate what the EU will propose for a U.S. agreement. The EU has an agreement with China that each will honor ten of the others geographical indications. They are also included in early talks with Japan about a possible trade agreement.
On the surface, it would appear that it will be hard to find a middle ground between the two approaches to geographical indications. The EU has invested too much in their efforts to now abandon it to get an agreement with the U.S. The EU is aggressively pursuing trade agreements with counties like the U.S. and Japan knowing that the challenges are huge, yet they recognize that the world is moving toward freer trade and they have to be part of that movement, as does the U.S.
Ross Korves is an Economic Policy Analyst with Truth About Trade & Technology (www.truthabouttrade.org).