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

In addition, the remarkable absence of the phrase "geographical indication" from the Wine Agreement may portend an effort to alter the scope of TRIPS without the consent of the WTO signatories. (244) Whereas Section 3 of TRIPS (Articles 22 through 24) is expressly dedicated to "geographical indications," the press release accompanying the Wine Agreement explicitly states the Wine Agreement "does not address the use of geographical indications, a form of intellectual property." (245) This choice of terminology is quite startling given that the Wine Agreement focuses on semi-generic terms of origin which "have been at the core of the dispute" over protection for geographical indications. (246)

Further, the approach taken in the Wine Agreement potentially signals a shift of two of the WTO's premier powers to a product-selective respect for geographical indications, rather than a blanket acceptance of the importance of these terms. (247) This movement to product-selective recognition of geographical indications threatens to exacerbate the rift between developing and developed countries that existed at the time of TRIPS negotiations. (248) Developing countries in the WTO most likely would be opposed to a product-based approach "given their concern that a product-based approach--especially one limited to wine--would not adequately cover their own geographically-based food and handicraft products." (249) The potential change in scope may inhibit further negotiations among the TRIPS signatories, especially concerning the contentious multilateral register issue. (250) Thus, just as the inclusion of the superseding grandfather clause in the Wine Agreement undermines TRIPS, the failure to employ key TRIPS terminology calls into question the vitality of TRIPS. (251)

Finally, perhaps the most significant aspect of the Wine Agreement as it relates to the future of TRIPS is not what the Wine Agreement includes, but what it fails to address. If the parties' intent is to carry over discussion on geographical indications to a second phase of negotiation, (252) their failure to achieve common ground after a decade of discussion post-TRIPS is a testament to the intractability and incompatibility of their positions. In light of this disconnect between the WTO's premier members, the prospects of achieving meaningful dialogue on a system of international registration for geographical indications as required under Article 23 of TRIPS (253) appears extremely unlikely.

Thus, it is no surprise that the European wine producers reacted with such outrage to the Wine Agreement. (254) For these producers, the fight over semi-generic names is about providing the consumer with accurate information regarding a product which is as much about grape varieties as it is about soil, sun, and craftsmanship. (255) In their view, the European Community traded away its two largest bargaining chips, acceptance of American production practices and loosening of certification standards, for a grandfather clause that ratifies the continued use of semi-generic terms by the greatest abusers of these terms. (256)

From the perspective of European Community officials, the Wine Agreement enabled Europe to retain access to one of its largest export markets and achieve heightened legal protection for 17 of its most precious geographic terms. (257) However, any leverage that the European Community possessed to enforce greater American compliance with Articles 22 through 24 of TRIPS now appears to be lost. The European Community must now turn to other sources of strength to achieve its desired ends, such as negotiations over other portions of TRIPS or threats concerning proposed changes to the Wine Agreement under Article 11. Neither of these options bode well for future amicable relations concerning the trade in wine.

B. The Future of the United States-European Community Trade in Wine

On its surface, the Wine Agreement appears to greatly benefit American winemakers at the expense of their European competitors. (258) While the European Community was able to extract an enforceable American promise to change the legal status of semi-generic terms of origin, the long-term effect of this American concession appears to be minimal at best. First, the high degree of consolidation among American wine producers, (259) coupled with the fact that the companies which dominate the market are also the greatest users of semi-generic terms, (260) means that the Wine Agreement's grandfather clause only serves to ratify the status quo where little risk of new users of semi-generics existed in the first place. Second, the shift in wine purchase patterns from jug wine, which maintains brand loyalty by using such semi-generics, to high-end premium bottles, which emphasize grape variety as a measure of product quality, (261) suggests that semi-generic terms of origin are becoming less relevant to the American consumer. Thus, the change in legal status for semi-generics appears to be a hollow victory for the Europeans.

At the same time, the relaxation of E.U. restrictions on American winemaking practices and certification requirements could be of great benefit to American wine producers. (262) These provisions, which facilitate the sale of American wine in the European market, occur at a crucial time when American wines have experienced unprecedented growth in the European markets. (263) If American wines were able to achieve such success in the face of cumbersome regulations under the Wine Accord of 1983 and its progeny, the easing of such regulations per the Wine Agreement should only enhance the prospects of future growth. Furthermore, the Wine Agreement provides market stability, which should enable American producers to operate with more efficiency and a better sense of market demand. (264)

IV. CONCLUSION

In the final accounting, the most significant aspect of the Wine Agreement is not what it means for the future of geographical indications, but rather what it says about the changing face of the global wine industry. In a desperate attempt to maintain its grasp over the lucrative and ever-expanding American wine market, the European Community gave up far more than it received--perhaps the European Community negotiators have finally come to recognize what the American consumer has already understood. The future of wine is not awash with Burgundy and Chianti, but instead is flowing with Sauvignon Blancs from New Zealand, Cabernets from Chile, and Pinot Noirs from Oregon. Facing such growing competition, the European Community has deferred the fight to another day. But, given the breadth of the ideological divide and the size of the stakes, the end of the Wine War is no where in sight.

(1.) See Press Release, U.S. Trade Rep., United States and European Community Reach Agreement on Trade in Wine (Mar. 10, 2006), http://www.ustr.gov/Document_Library/Press_Releases/2006/March/ United_States_European_Community_Reach_Agreement on Trade in Wine.html [hereinafter March Wine Agreement Press Release].

(2.) Christian Charcossey, US Threatens Wine War with EU, BUS. REPORT, June 23, 2005, http://www.busrep.co.za/index.php?fSectionId=566&fArticleId=2583675.

(3.) Daniel Sogg, Agreement Smoothes Over Rough Spots in Wine Trade Between America and Europe, WINE SPECTATOR ONLINE, Sept. 16, 2005, http://www.winespectator.com/Wine/Features_Print/0,2462,2904,00.html.

(4.) See Press Release, U.S. Trade Rep., United States and European Community Reach Agreement on Trade in Wine (Sept. 15, 2005), http://www.ustr.gov/ Document_Library/Press_Releases/2005/September/United_States_European_ Community_Reach_Agreement_on_Trade_in_Wine.html (discussing the issues the agreement does not address).

(5.) See Stacy D. Goldberg, Comment, Who Will Raise the White Flag? The Battle Between the United States and the European Union over the Protection of Geographical Indications, 22 U. PA. J. INT'L ECON. L. 107, 107, 136 (2001).

(6.) Id. at 108-09, 135-36.

(7.) See Agreement on Trade-Related Aspects of Intellectual Property Rights, [section] 3, art. 22(1), Apr. 15, 1994, 33 I.L.M. 1125, 1205 (1994) [hereinafter TRIPS].

(8.) See Linda Murphy, Recognizing Wine's Taste of Place, S.F. CHRON., Aug. 4, 2005, at F1, available at http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/08/04/ WIG1LE1N351.DTL&type=printable.

(9.) Id.

(10.) Id.

(11.) See Goldberg, supra note 5, at 107, 110, 144; see also Maureen Benson-Rea, Roderick J. Brodie & Wayne Cartwright, Strategic Issues Facing the New Zealand Wine Industry in a Global Environment, http://www.unisa.edu.au/winemarketing/conferences/ docs/File028.pdf (2003). In 2004, Italy, France, and Spain, the three largest wine producing countries in the world, combined for a 59% share of the world's wine exports. See U.S. DEP'T OF AGRIC., WORLD WINE SITUATION AND OUTLOOK 3, 5 (2005), http://www.fas.usda.gov/agx/Processed/Wine/Circulars%20and%20Reports/ WorldWineSituationandOutlookApril2005.pdf [hereinafter DOA OUTLOOK] (listing 2004 market share as 21% Italy, 19% France, and 19% Spain). Wine production is a significant driver of the economies of these traditional wine producing countries. See Corie Brown, Who's Killing the Great Wines of France?, L.A. TIMES, Mar. 2, 2005, at F1 (asserting that in France wine represents 12% of agricultural production and $9.9 billion (USD) of gross domestic product).