New trade opportunities for regional specialities

Under the EVFTA, some kinds of items produced in Vietnam will have its geographical indication protected in the EU

Everyone knows that Father Christmas – the one and only – comes from a barren landscape in Lapland, the northernmost region of Finland. In traditional legend, he often sits on a sleigh pulled by eight reindeer through the night sky to deliver gifts to children on Christmas Eve.

In Lapland, reindeer are now a popular tourist attraction and one of the nation’s best-known features.

Tourism offers many opportunities as a supplementary livelihood to reindeer husbandry in the region. Many herders earn extra income by making and selling souvenirs and handicrafts, providing accommodation and programmes and leisure services such as reindeer rides, visits to reindeer farms, and introducing visitors to reindeer husbandry.

In addition, reindeer is also a famous source of foodstuff in Finland. Reindeer meat comes from abattoirs and meat processing plants that comply with EU directives.

Notably, reindeer are among the 12 Finnish products with geographical indication (GI) protected in Finland and the EU, such as potatoes from Lapland, rye pies with lingonberries from Kainuu, traditional beer, Finnish vodka, karelian pies, and vendace from Puruvesi lake.

Under the EU-Vietnam Free Trade Agreement (EVFTA) inked on June 30, 2019 in Hanoi by the EU and Vietnam, a further 157 EU products will have their GIs registered, recognised, and protected in Vietnam after the deal takes effect, which is expected to be in early 2020.

Strong commitments

Before the inking of the EVFTA, Vietnam and the EU worked intensively on boosting the recognition and protection of GIs for their respective products, focused on agricultural and foodstuff products which cannot be found in third markets. GI is considered one of the most important contents of the deal as a whole.

A GI is a distinctive sign used to identify a product as originating in the territory of a particular country, region, or locality where its quality, reputation, or other characteristics are linked to its geographical origin, according to the agreement.

Under Article 12(23) of the agreement, the two sides have agreed to promote “the recognition and protection of GIs indications for wines, spirits, agricultural products, and foodstuffs which originate in the territories of the parties.”

“Each party shall provide for the enforcement of protection of GIs by appropriate administrative action, to the extent provided for by its domestic law, to prohibit a person from manufacturing, preparing, packaging, labelling, selling, importing, or advertising a food commodity in a manner that is false, misleading, or deceptive or is likely to create an erroneous impression regarding its origin,” stated the EVFTA.

The EU supports better protection of GIs internationally, with a view to preventing their increasing misuse and counterfeiting. The abuse of GIs limits access of the genuine products to certain markets and undermines consumer confidence. Fraudulent use of GIs thus hurts both producers and consumers.

“As a result of the trade agreement, farmers and businesses producing 169 European GIs will benefit from recognition and protection on the Vietnamese market at a comparable level to that of EU legislation,” stated a recently-released guide to the EVFTA

“This means that the use of GIs such as champagne, feta, parmesan, rioja, and roquefort will be reserved in Vietnam for products imported from the European regions in which they originate,” continued the guide. “This protection will apply once the trade agreement enters into force and will be enforced in the Vietnamese market through appropriate administrative sanctions, including upon request of an interested party.”

Meanwhile, 39 Vietnamese GIs will also be recognised and protected as such in the EU thanks to the agreement, providing an adequate framework for further promotion of quality products such as Phú Quốc fish sauce, Mộc Châu tea or Buôn Ma Thuột coffee.

Nicolas Audier, chairman of the European Chamber of Commerce in Vietnam (EuroCham) said, “In doing so, the EVFTA will boost investor confidence in Vietnam and further encourage foreign direct investment in its markets. On top of this, the EVFTA will also increase consumer confidence and protection, as it will refuse to grant GI status to products using misleading claims about their origin or nature.”

GI enforcement

According to EuroCham, the protection of GIs was a key interest for the European Union during the negotiations of the EVFTA, as it represented a large potential market for EU small- and medium-sized enterprises. The adopted text of the EVFTA sets a higher protection of intellectual property (IP) right in the field of GIs.

“A higher level of protection in the EVFTA is also ensured through the refusal to grant GI protection to a product using a designation or presentation misleading the consumer on its origin or nature, notably through the use of expressions such as kind, type, style, or imitation. This is a great improvement for GI protection in Vietnam,” stated a recently-released EuroCham’s EVFTA report. “The higher level of protection of EU and Vietnamese GIs is a significant achievement for the development of IP regulations in the country and the attractiveness of the Vietnamese market to foreign investors.”

However, according to EuroCham, Vietnamese consumers and businesses have little knowledge of GIs and of the differences between products benefiting from GI recognition and other similar goods. The procedural length of registration of GIs and the overall difficult enforcement of IP rights in Vietnam also pose a risk to the application of EVFTA provisions.

Despite gaps remaining between the provisions of the EVFTA and of the Vietnamese Law on Intellectual Property, authorities are pursuing efforts to amend conflicting regulations so as to ensure the ­complete and effective implementation of the EVFTA before its entry into force.

Effective IP rights protection requires more than comprehensive legislation: it also requires strong enforcement. The EVFTA clarifies the obligations of customs officers and authorities in Vietnam, and gives them better tools to tackle infringements through provisions to improve the legal framework and act against violations, including the blocking of bank accounts and assets.

According to Tran Duc Anh at Southeast Asian regional law firm Tilleke & Gibbins, though 169 EU and 39 Vietnamese GIs will be protected without going through the standard registration process, a GI must pass a standard process with the Vietnam Intellectual Property Office to be protected.

“Such protection may be rejected if there is a homonymous GI which may mislead consumers,” Anh explained. “Although Vietnam has the right to decide on the conditions in which homonymous GIs are considered different from each other, the current regulations are silent on this issue.”

According to the Delegation of the European Union to Vietnam, it is clear that if Vietnam well performs its job in protecting the GIs of EU enterprises, Vietnamese consumers will have opportunities to enjoy more EU agricultural products such as Finnish reindeer meat or French champagne which are expected to be exported to Vietnam over the next years following the removal of import tariffs.

Furthermore, the prestige of the Vietnamese market will also be improved, with a more business-friendly climate created for investors and enterprises.