Results of Trade Decision Unclear

California’s agricultural and wine officials said Wednesday that they expected little to no effect from a confidential ruling by the World Trade Organization this week that found Europe’s “geographical indications” regulation violates global trade rules.

At issue in the ruling is the protection of food products and beer that carry geographical names, such as Parma ham or Roquefort cheese, but not wines or spirits, which are covered under a separate system. The U.S. challenged the system as unfair because of its complexity and said it discriminated against U.S. products.

“This is a big win for American farmers and food processors,” U.S. Trade Representative Robert B. Zoellick said Tuesday. “We brought this case because we believed that under WTO rules, U.S. farmers, ranchers and other food producers should have the same access to protection ... as European producers. Europe clearly failed to provide this access.”

Because the ruling has not been released, only U.S. and foreign trade officials have seen it.

“It’s difficult to sort out at this point” what the ruling means because it is still confidential, said Dan Griswold, director of the Center for Trade Policy Studies for the Cato Institute in Washington. “But it is clearly a win for the U.S. government and will make it easier for U.S. companies to sell their products in Europe.”

The implications for the confidential ruling hinge on the right to translations of a registered product.

Under the EU system, manufacturers can register the product in one language with one national authority and challenge any use of a translation of that name in another EU member nation.

Unlike company-specific trademarks, designations by the EU indefinitely protect food and drink names with links to a region of origin. The EU, which counts 450 million consumers, will be allowed to keep protections on existing regional and traditional names, including feta cheese, Champagne and Parma ham.

In California, farmers and agricultural officials were still mulling over the ruling.

Joel Nelson, president of California Citrus Mutual, a growers trade association, said he expected the ruling to have little effect because “almost none” of California’s $1-billion orange crop was sold in Europe.

The ruling probably won’t affect state farmers much, said Dave Kranz, spokesman for the California Farm Bureau Federation, a trade group of 89,000 farmers, although he noted that the group hadn’t read the ruling.

Wendell Lee of the Wine Institute, a trade group, said, “The ruling does not directly affect any protections for wine names, but it does put the [European Union] on notice that their system for the protection of [geographical indications] is inconsistent with their international obligations.”

On Wednesday, the Europeans disputed Zoellick’s interpretation of the ruling.

“Contrary to Mr. Zoellick, we do not see in the conclusions of the WTO panel any question of the European system of protection for geographical names,” Claude Veron-Reville, the European Commission’s spokeswoman for trade, said at a Brussels news conference. “Rather the contrary.”

*

Bloomberg News was used in compiling this report.