WIPO Journal - World Intellectual Property Organization

The Economic Effects of Geographical Indications
on Developing Country Producers: A Comparison
of Darjeeling and Oolong Teas
Deepthi Elizabeth Kolady *
Research collaborator with International Food Policy Research Institute; visiting fellow
at Cornell University
William Henri Lesser **
Professor at the Dyson School of Applied Economics and Management, Cornell University
Chunhui Ye ***
Associate Researcher at the China Academy for Rural Development, School of
Management, Zhejiang University, China
Developing countries; Economics and law; Geographical indications; Tea
The general perception about geographical indications (GIs) seems to be that benefits will flow to
smallholders in local communities, but the correctness of that assumption has to date not been analysed
empirically. This study provides both a method for calculating the recipients of benefits from GIs as well
as applications to Darjeeling tea (India) and Oolong tea (China). Our analysis suggests that countries
must select their GIs very carefully as the confluence of product familiarity in international markets and
land ownership patterns needed for the generation and widespread distribution of benefits will be rare
events.
Introduction
The Uruguay Round of the WTO was premised on a purported balance of enhanced market access, with
developing countries expanding access for manufactured products while developed countries improved
access for agricultural products. Many observers believe the execution was anything but balanced, with
developing countries indeed reducing barriers to manufactured goods while developed countries largely
reneged on a commitment to improve access for agricultural goods. Unsurprisingly, many developing
country representatives have protested, with some of the strongest objections focused on the upward
harmonisation of minimal international intellectual property rights (IPR) protection standards, as specified
in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). TRIPS requires,
among other changes, that national laws provide IPR protection for pharmaceutical products and plants.
One of the several TRIPS-mandated forms of protection has the potential to enhance the value of largely
agricultural exports from developing countries. This form, known as geographical indications (GIs), is
little used by developing countries. The European Commission has identified about 900 GIs in Europe
* Email: dek28@cornell.edu.
** Email: whl1@cornell.edu.
*** Email: chhye@zju.edu.cn.
(2011) 2 W.I.P.O.J., Issue 2 © 2011 Thomson Reuters (Professional) UK Limited
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