EU gaining a double benefit: Free Trade and GI protection

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The EU-India Free Trade Agreement is under the scanner, as dairy-cooperative Amul has raised concerns regarding the adverse impact of reduced import duties for EU dairy products. The cooperative’s Managing Director has urged the Indian Commerce Minister to desist from accepting such terms as they would be detrimental to the interests of Indian farmers and consumers. It is feared that further reduction in import duties would enable the EU to dump subsidized products in the Indian market. It must be noted, as pointed out by Economic Times, EU does not allow import of Indian dairy products, citing its strict sanitary standards, which is suspected to be nothing but a non-tariff barrier.

It is pertinent to note that the EU has a host of GIs for various dairy products like Feta, Mozzarella, Emmentaler etc. (all different kinds of cheese). The EU is trying to extend protection of these GIs to countries outside the EU by requiring the country with which it is negotiating an FTA to protect some or all of its registered GIs. This pattern has been observed in the EU-South Korea FTA and EU-Singapore FTA.

GIs for EU dairy products have not yet been registered in India. It remains to be seen if India will accept terms for enabling EU GI registration under the FTA. Currently, only six foreign products have been registered in India (GI) – Champagne (France), Cognac (France), Prosciutto de Parma (Italy), Napa Valley (USA), Scotch Whisky (UK) and Peruvian Pisco (Peru). 

For the EU, GIs are an important tool to secure market control as they indicate quality and reputation of the product. Such protection, therefore, enables EU dairy products to fetch premium prices. Given that GI protection already enables the EU to gain market access a further need of lowering import duties to capture markets, seems like an unnecessary double benefit. 

It bears noting that EU trade interests are well protected under the TRIPS as well. Article 23 of the TRIPS, which was almost specially designed for the EU, recognizes a higher level of protection for GIs on wines and spirits. For such GIs merely establishing that a similar indication was used for a wine/spirit (which does not originate from the indicated geographical area), regardless of whether it misleads the public, creates a ground for action. 

Given these provisions, EU trade interests seem well protected and undue reduction in import duties raise legitimate fears of dumping, unemployment and welfare loss.