International trade between countries is a benefit for us as individuals in Mexico. It is a lever of development, which supports the internal market acceleration with the purpose to create synergy flux with the external market and therefore make of the country an economical power.
Today Mexico is a country with an economy oriented to exports. It is totally open to commerce. It is also the only country in the world which is subscribed to the largest number of international trade agreements. From its incorporation to the GATT agreement in 1986, Mexico has paved a strategic path in generating international trade options. Today, with its incorporation to the United States, Mexico and Canada Free Trade Agreement (USMCA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the updated version of the EU-Mexico Trade Agreement, this plan is now being rewarded with its entrance into an international market with one of the highest flow of products and capital of the world.
Despite this remarkable macroeconomic status, Mexico is also a country with many internal economy contradictions. The internal market suffers of deceleration, there are many gaps between wealthy people and people with low economic resources, and the challenge to generate an increase on income for the internal market. Obsolete fiscal and labor laws also constitute a challenge for Mexico to scale in its economic growth. The most important challenge will be to make an adequate and correct implementation of the Treaties and of the rules set for all their chapters, which include changes to labor and fiscal laws, or to generate new laws in order to be at the same level of negotiation as its other treaty partners.
INTERNATIONAL TRADE AGREEMENTS AS AN INSTRUMENT FOR CREATING BUSINESS
The USMCA, the CPTPP and the updated version of the EU-MX Free Trade Agreement, are the most recent agreements that Mexico has entered to. Up to this year 2020, they are still pending to enter in force. The market potential of being a member of these agreements is endless. It represents the possibility of diversifying trade relations where entrepreneurs of the different sectors in Mexico can invest and make business in the different countries members of the treaties, besides USA and Canada and where these countries are able to invest in Mexico with a strong legal, economic and social framework who will make Mexico a safe harbour for foreign investments and entrepreneurs from Mexico will be able to generate business in these countries. The rules set in these agreements will regulate the flow of the market and will support every large investment decision with a firm and stable legal framework.
APPELLATIONS OF ORIGIN AND THEIR ADDED VALUE
An important feature of these international treaties is the import-export flow of agricultural products. Countries are very concerned regarding the protection of their original products. A fundamental part in protecting this exclusive and original products relies on the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration, an international treaty which provides protection for Appellations of Origin, that is "a geographical denomination of a country, region, or locality, which serves to designate a product originating therein, the quality or characteristics of which are due exclusively or essentially to the geographic environment, including natural and human factors" (WIPO. WIPO-Administered Treaties. Lisbon Agreement. https://www.wipo.int/treaties/en/registration/lisbon/). These appellations are what we know as Geographical Indications (GI) and Denominations of Origin (DO).
The Lisbon Agreement, protects the national economic interests of a country, especially where goods bearing an appellation of origin represent a substantial share of exports. Therefore, it is substantial that the appellations are effectively protected against any appropriation in the largest possible number of countries. That is, the Lisbon agreement was designed to protect a certain native appellation of origin in another country member of the Lisbon system – member of the Lisbon Agreement-.
Particularly, the protection of the European Union (EU) local GIs and DOs are of main concern to the European Union and therefore we will take the (EU) example to develop our topic. This same exercise has been made in the negotiation of the corresponding chapters in the USMCA and the CPTPP agreements in order to comply and balance the GIs trade conditions.
The agricultural products that possess quality, reputation and tradition in its manufacture, are protected by this Geographical Indications system, which includes the Denominations of Origin as a GI subset of more selective features that totally and specifically depend on the geographical and environmental characteristics of the region and of the manual and special craftsmanship developed by the communities which manufacture these products. There you find the quantity and authenticity that makes worth the cost when you consume them.
We are all familiar with the unique distinction that an appellation of origin confers to a product. We also understand the value that a legally certified designation of the geographical origin poses on a commercial product. This designation confers the product an added value, it makes it very special and appreciated, and, above all, one can understand the quality, reputation and tradition it encloses and why they are so famous, respected and highly priced. If we consider that this product is also exempted from the custom duty, by being a product covered by any one of the International trade agreements that we have mentioned, we will be able to see the huge commercial advantage of having products designated as a GI or a DO and therefore, their striking economic power.
GIs and DOs: MOTOR OF ECONOMIC GROWTH
Apellations of Origin – Gis and DOs – are conspicuous Intellectual Property (IP) legal figures that confer collective rights for the appellation producers, besides the exclusive and unique distinctiveness to the product that they cover, and at the same time guarantee the certified geographical origin to the consumer of the origin-certified product as long as they comply with the regulatory norms (Mexican Official Norms - NOMs) for the corresponding appellation. Appellations of origin are property of the State.
GIs and DOs must be owned by the State. If that were not the case, being the sole owner of a DO or of a GI would make these appellations to lose all its trade potential, and all the benefits they grant to the producers and groups of producers because they would be owned just by an individual. The purpose of these appellations, which is to furnish every geographically original product with the certification of origin the appellations bestow, would simply not be there.
In May 2015, the adoption of a new Lisbon Agreement for the Protection of Appellations of Origin and their International Registration took place in Geneva. This Geneva Act establishes an updated international system of registration and protection for both appellations of origin and geographical indications. This new system is designed to help ensure that holders of appellations of origin and geographical indications can file a single application and pay one set of fees to seek protection in multiple jurisdictions according to Article 4 of the Lisbon Agreement.
Together, the Lisbon Agreement and the Geneva Act of the Lisbon Agreement form the Lisbon System. This system offers more accessible and effective international protection for the names of origin-based quality products. This is not only advantageous for producers who want stronger legal protection for their brands in global markets. It also benefits consumers seeking assurance about the quality, authenticity and traceability of products.
In the case of the EU-Mexico Free Trade Agreement (EU-MX), both countries have provided a legal framework that allows to prevent the use of the European listed GI or DO in Mexican goods of the same kind, not of the same kind, or services, and vice versa, under the conditions defined by the treaty. They also have established legal means to prevent any misuse of the GI or DO which includes imitating the appellation of origin (Sub-Section 4 of the EU-MX).
Under the Lisbon Agreement conditions, Mexico must recognize the DOs and GIs that the European Union is exporting to Mexico, and the European Union must do the same with the Mexican Denominations of Origin.
The European Union wine, food and spirit drinks GIs and DOs, as well as the International Appellations which the EU recognizes are registered in the eAmbrosia database of the European Commission. This database gathers the information of the registered appellations of origin from the European Union on the period from 22nd December, 2019 to 23rd March 2020. Earlier data are registered on the DOOR database of the European Commission. The 3713 records include 1607 records for wine, 1472 records for food products, and 242 records for spirit drinks. Spirit drinks as Tequila from Mexico, Pisco from Peru, or Rum from Guatemala are included in the recognized foreign Denominations of Origin included in this database.
A fundamental point of the negotiation of the EU-MX, was to preserve the protection of a selection of 340 products of interest with an appellation of origin from the European Union. A document with this list - ANNEX II Part A - was published in the Mexican Official Gazzette on August 10th, 2017 to receive observations and objections to the list of EU appellations of origin to be exported to Mexico. The final document of the Treaty includes the outcome of these observations as annotations to the text.
In turn, a list of 20 Mexican food Appellations of Origin - ANNEX II Part B was included and given the same treatment. An additional list of 19 names of interest to Mexico, which identify a product originated and protected in Mexico - ANNEX III - was also included. This list of products were agreed to be taken in consideration provided that the scope of protection of the EU-MX is enlarged.
One of the reasons why the most important reform of the Mexican IP Law in 25 years included the addition of a separate chapter describing Geographical Indications, complementing the description of Denominations of Origin which was already described in the year 1994 version of the Law, was an action required for Mexico to comply with the international treaties conditions and commitments contracted and then be at an equal level of negotiation with USA, Canada, the European Union and with the countries subscribed in the CPTPP.
The Mexican Appellations of Origin system needs a structure that supports the adequate economic flow in order to accelerate the internal market and to sustain the exports activities and therefore the economic potential in the country. How? By registering trademarks under the Mexican DOs or the GIs to take the maximum advantages and benefits to producers that they offer, therefore creating movement and flow of the products and goods to strengthen Mexico's export power, to look for the registration of more DOs and GIs to give legal certainty and protection to the flux of products in both the external and internal Mexican markets. It is a system designed to promote investment and to generate the corresponding return, so an answer to the producers is to enter the competition by increasing the quality of their products protected by the DO or the GI and to reorder the structure and operation of their corresponding Appellation Regulatory Counsels.
The opportunity of taking the maximum advantage of these treaties offers attractive horizons for investment and generation of business. Now the platform is open and the opportunities to generate economic benefits for the people in Mexico are there to take and to generate business strategies and plans of action to be a part of the global value chains. It is Mexico's time to grow.
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