3. The representative of Argentina recalled that at the April meeting the EC delegation had said that its proposal ("EC proposal") did not constitute TRIPS-plus in the sense that it did not go beyond the TRIPS provisions and did not therefore alter the existing balance of rights and obligations. Like many other Members, Argentina was of the opposite opinion: the EC proposal would actually alter the balance of rights and obligations negotiated in the Uruguay Round by creating new obligations impairing the rights acquired under the TRIPS Agreement and modifying its basic principles.
4. Besides the obligation to maintain bilateral negotiations among Members, the "creation of an 'opposition procedure' and/or an ad hoc dispute mechanism" as indicated in the EC proposal (IP/C/W/107/Rev.1) would create a quasi-judicial procedure departing from the WTO dispute settlement system. Such a procedure could not be adopted through a notification and registration system but only in accordance with the provisions of Article X of the WTO Agreement. In the TRIPS Agreement, the right to challenge a GI or the application of exceptions of Article 24 for example were not subject to any international opposition procedure or to compulsory bilateral or multilateral negotiations. The EC proposal would impair and even nullify the flexibilities obtained in the Uruguay Round by affecting not only the provisions of Section 3, Part II, but also other provisions of the TRIPS Agreement. Under Articles 22 and 23, Members only had the obligation to provide the legal means for right holders from other Members to seek protection. In other words, as for other categories of IPRs under the TRIPS Agreement, right holders from a Member must obtain the grant of their rights in other Members on a country-by-country basis due to the territoriality principle, which was inherent to all IPRs, including GIs. The EC proposal, which attempted to create a kind of international application for protection of a GI and a right to universal validity based on the extraterritorial application of a national legislation, would eliminate the territoriality principle. It would deprive Members of their rights under Article 1.1 of the TRIPS Agreement. The European system of protection of GIs was developed following changes in the Common Agricultural Policy, namely the subsidization of quality and of product differentiation instead of the subsidization of quantity. This was not necessarily the policy of other WTO Members.
5. The EC proposal would increase the obligations of Members with the establishment of a new system of protection that created legal presumptions, including irrebuttable ones, with effects such as the reversal of the burden of proof. It required the elimination of the exception under Article 24.6 regarding generic names after a certain time-limit, and undermined Article 24.5 regarding prior trademarks by privileging GIs to the detriment of prior trademarks with consequent losses to producers who had been legitimately using their registered trademarks in trade. With such presumptions, the EC proposal undermined the right of individual parties under a Member's national law to invoke the TRIPS exceptions at any moment in that Member's jurisdiction. It also restricted in terms of time-limits the possibility for individual parties to invoke exceptions in other jurisdictions, allowing only governments to invoke them at the international level. There were no such time-limits under the TRIPS Agreement.
6. As a result, non-European producers would lose the right to use generic terms or trademarks which they had been legitimately using in third markets, if not in their own. Those producers would lose sales and markets where they had often contributed to the dissemination of names and to consumer recognition of products by these names. Many of these names had been disseminated during the strong migratory currents from Europe to the rest of the world by the Europeans themselves, who had first used such names when they migrated and continued using them for products they consumed or produced. According to estimations, between the second half of the 19th century and the first half of the 20th century, 11 million Europeans emigrated to Latin America, out of which 38 per cent were Italian, 28 per cent Spanish and 11 per cent Portuguese. Half of them went to Argentina.
7. The EC proposal would create an unprecedented IP system, and, what was worse, it would be a system created in a vacuum. Recalling that under Article 1.1 of the TRIPS Agreement Members "[shall] be free to determine the appropriate method of implementing the provisions of [this] Agreement within the framework of their own legal system and practice", the representative of Argentina said that there was no harmonization, at the international level, of substantive law in the field of GIs, which would be the minimum requirement for any process with the kind of results sought by the European Communities. She recalled that there was no mandate for amending the TRIPS Agreement or for undertaking negotiations regarding a substantive harmonization in the WTO or in any other international forum. The EC were attempting to use their legislation as a basis for the grant and refusal of rights at the national level of each Member, going beyond the principle of territoriality and the private right character of IPRs. Through a negotiation aimed at establishing a procedural system, the EC were attempting to achieve a disguised substantive amendment to the TRIPS Agreement. Nothing justified the need for granting to owners of GIs a status higher than that granted to owners of other IPRs covered by the TRIPS Agreement.
8. The proposed system would entail significant costs both at multilateral and national levels. The representative of Argentina asked the European Communities to clarify what the cost would be of managing such a system and what the cost would be of re-conversion of products, i.e., of re-labelling and of marketing. For countries as yet without such a system, the examination of whether or not a GI notified under the multilateral system could be challenged would be extremely complicated and costly. It would not only be necessary to compare the registers of GIs and trademarks but also to verify for example whether or not a name had become generic. It would also be necessary to verify that the GI was not a protected grape variety or a name used by a person or by that person's predecessor in business. This complex information would require the use of a system and human resources with costs that not all Members would be able to bear and for which the TRIPS Agreement did not foresee any obligation. With all the examinations required under the EC system, producers in many countries would automatically lose any rights of protection and those countries would be obligated to protect the notified GI. The costs of such a system would be reduced only in favour of European producers because the actual costs for obtaining protection would be transferred to governments and producers of third countries. In this regard, developing and least-developed countries would obviously be the ones to suffer most from the prejudice.
9. European producers received substantial subsidies for the development of products protected by geographical indications, in some cases directly or through structural funds for the development of rural areas or for anchoring producers in those areas. Referring to the fact that the European Communities had identified certain geographical indications in their tariff nomenclature, the representative of Argentina said that if an analysis of certain products were made, it would be difficult to determine that they were not substantially-like products as defined by the GATT and the TBT Agreement. This discrimination in the nomenclature was another "plus" that the EC were attempting to add to IPRs. The multilateral trade system had the aim of increasing competition through the reduction of tariff and non-tariff barriers. With regard to IPRs, certain practices or protection systems might have adverse effects on trade. In the Preamble of the Marrakesh Agreement, Members had agreed to enter into reciprocal and mutually advantageous arrangements directed to the "substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international trade relations". The TRIPS Agreement, in addition to being covered by the objectives of the multilateral trade system, aimed "to reduce distortions and impediments to international trade, and taking into account the need to promote effective and adequate protection of intellectual property rights, and to ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade". Moreover, Article 8 of the same Agreement stipulated that Members might adopt appropriate measures "to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology". Clearly, the EC proposal would unreasonably restrain legitimate trade of wine and spirits.
10. The representative of Argentina further referred to the 2002 report made by the Commission on Intellectual Property Rights ("CIPR") set up by the Government of the United Kingdom. The CIPR report indicated that only 20 countries, mostly developed ones, were party to the Lisbon Agreement and that by 1998 out of 766 appellations of origin protected under that Agreement 95 per cent belonged to European countries. The main message of the report was that developing countries should avoid compromise solutions that reflect the regimes of protection of IPRs in developed countries, which should not press for stronger procedures regarding IPRs. The report further suggested that new studies should be undertaken before developing countries could consider accepting new solutions within the WTO. Argentina fully shared the views expressed by the CIPR report.
