No more whining about geographical indications: assessing the 2005 agreement between the United States and the European community on the trade in wine.

With the most recent extension of the Accord about to expire, the United States again used the threat of legislative action to create European incentive to arrive at an agreement favorable to American wine producers. (185) This time, American officials threatened to stiffen the application of the Bioterrorism Act, which affects the importation of all food and drink. (186) The Europeans, however, were not passive victims of aggressive American negotiation tactics. (187) During recent talks, frustrated with their inability to reach agreement on wine-naming practices, the Europeans walked away from the bargaining table. (188) The European negotiators debated whether to let the Accord lapse, a move that would have been "tantamount to a declaration of war between the world's wine superpowers." (189)

E. The Wine Agreement of March 2006

Finally, on March 10, 2006, after 22 years of negotiating and posturing, the United States and the European Community arrived at an accord. (190) This is known as the Agreement between the United States of America and the European Community on Trade in Wine (the Wine Agreement). (191)

The first substantive portion of the Wine Agreement is concerned with winemaking practices. (192) It establishes recognition by each party of the other's winemaking laws and regulations as authorizing "wine-making practices that do not change the character of wine arising from its origin in the grapes in a manner inconsistent with good wine-making practices." (193) Addressing a major area of contention during the series of temporary extensions of the Accord, the Wine Agreement provides that neither party shall block the importation of wine on the basis of the other's winemaking practices. (194) This portion of the Wine Agreement greatly benefits American wine producers who may export wine produced by techniques that are banned in Europe, such as adding wood chips to give the product an enhanced oak flavor. (195)

The second substantive portion of the Wine Agreement, entitled "Specific Provisions," is comprised of Articles 6 through 9 and concerns a number of areas. (196) First, with regard to semi-generic terms of origin, under Section 1 of Article 6, the United States pledges to seek a change in legal status for a set of 17 semi-generic terms (197) such that these terms can only be used on wines produced in the European Community. (198) Wine labels that do not conform to this provision are to be blocked from the market. (199) Similar to the approach adopted by TRIPS, however, Section 2 of Article 6 is a grandfather clause whereby Section 1 does not apply to winemakers using a prohibited term as defined by Annex II "where such use has occurred in the United States" before the later of December 13, 2005, or the signing of the Wine Agreement. (200) In addition, the wine labels for wines employing semi-generic terms must comply with the BATF regulations that were in force as of September 14, 2005. (201) Accordingly, such labels must indicate the wine's true origin as the United States. (202) Despite dealing with semi-generic names, this section of the Wine Agreement does not make reference to geographical indications. (203) Congress codified these provisions as part of the Tax Relief and Health Care Act of 2006, (204) which was signed into law by President Bush on December 20, 2006. (205)

Article 7 is designed to prevent European terms of origin from becoming generic terms in the United States. (206) Under Section 1 of Article 7, names of origin listed in Annex IV may only be used "to designate wines of the origin indicated by such a name." (207) The names listed in Annex IV include "names of quality wines produced in specified regions," such as France's Vacqueyras or Italy's Chianti Classico, or "names of table wines with geographical indications," such as Italy's Toscana/Toscano or Spain's Vino de la Tierra de Castilla. (208) This expands the list of nongeneric terms, which are not distinctive designations as specified under the BATF Regulations. (209) In return, the European Community promises reciprocal treatment for "names of viticultural significance" in the United States as listed in Annex V--for example, Napa County's Stags' Leap District. (210) As above, both parties pledge to prevent wine bottles not in conformity with this provision from reaching the consumer. (211) Finally, Section 4 asserts that the United States will preserve the status of the terms identified in 27 C.F.R. [section] 12.31 as nongeneric, distinctive designations. (212)

Article 8 of the Wine Agreement sets forth acceptable standards for wine labeling. (213) Echoing TRIPS, this section begins with a basic understanding that wine labels sold in each party's territory "shall not contain false or misleading information in particular as to character, composition or origin." (214) Next, the parties agree that wine labels may contain "optional particulars" as described in a supplemental portion of the Wine Agreement dubbed the Protocol on Wine Labeling (the Protocol). (215) The Protocol also provides a list of approved vine variety names that may appear on a wine label, which enables the listing of a single variety so long as 75% of the wine is produced from grapes of that variety. (216) Finally, among other labeling issues agreed upon, Article 8 sets forth a mutual agreement that winemaking processes, treatments, and techniques need not be disclosed on the label. (217)

Article 9 of the Wine Agreement attempts to simplify the process of wine certification. (218) Specifically, it implements a standard certification form for wines originating in the United States (219) that requires a description of the product limited to alcohol strength and color. (220) In addition, the accompanying certification documentation may be preprinted and submitted electronically to the importing country. (221) Finally, Article 9 requires both parties to provide notice to each other when considering changes to their respective certification forms. (222)

The third substantive section of the Wine Agreement contains Articles 10 through 16 and is entitled "Final Provisions." (223) Article 10 promises future negotiations to commence between the parties within 90 days of the Wine Agreement's entry into force "with a view toward concluding one or more agreements that further facilitate trade in wine between the Parties." (224) The second phase of negotiation will include a more detailed discussion on geographical indications, semi-generic terms, winemaking practices, and certification. (225) Article 11 sets forth the standards for future management of the Wine Agreement. (226) Next, Article 12 establishes the relationship between the Wine Agreement and other treaties and laws. (227) With respect to TRIPS, Article 12 provides that the Wine Agreement shall not "affect the rights and obligations" under that treaty nor shall it command any obligations concerning intellectual property rights that TRIPS does not require. (228) Articles 13 and 14 concern implementation and withdrawal from the Wine Agreement respectively. (229) The Annexes and Protocol are included in the Wine Agreement by virtue of Article 15. (230) Article 16 outlines the additional languages in which duplicate copies of the Wine Agreement are written. (231) Finally, Article 17 establishes that the Wine Agreement will enter into force upon signing. (232)

III. ASSESSING THE IMPACT OF THE WINE AGREEMENT

Given the United States' reluctance to accept the portion of TRIPS dealing with geographical indications, (233) the Wine Agreement is a notable step towards compliance with TRIPS. Article 24, Section 1 of TRIPS provides, "Members agree to enter into negotiations aimed at increasing protection of individual geographical indications under [A]rticle 23." (234) In this way, the very fact that the United States entered into a bilateral agreement that concerns terms of origin is itself evidence of compliance with TRIPS.

This recent compliance with TRIPS stands in contrast to the lack of respect the United States has historically shown for Articles 23 and 24. (235) In 1997, only three years after the signing of TRIPS, Congress passed the Taxpayer Relief Act, which codified treatment of semi-generic designations under the BATF regulations. (236) By permitting the use of semi-generic terms with a set of limited restrictions, (237) the United States flouted the obligations under Article 24 of TRIPS, which enables continued use of geographical indications only where there is evidence of good faith or use 10 years prior to the signing of TRIPS. (238)

A. The Future of TRIPS

In many ways, the Wine Agreement continues the pattern by which the United States has undermined the principles agreed upon in TRIPS. (239) Just as 26 U.S.C. [section] 5388 rendered the TRIPS grandfather clause meaningless with respect to American wines, (240) Article 6 of the Wine Agreement usurps TRIPS by creating a new grandfathering date of December 13, 2005, or the signature of the Wine Agreement, whichever is later. (241) In this way, the Wine Agreement effectively emasculates a key provision of TRIPS. (242) If essential elements of the TRIPS agreement can be renegotiated so that more favorable terms only apply to selective signatories, the legitimacy and authority of the entire TRIPS accord is in peril. Furthermore, the United States may be unwittingly harming its own interests because the practice of ignoring and renegotiating may be employed by other WTO signatories to achieve more favorable terms in areas of TRIPS that are far more crucial to U.S. interests. (243)