CHAMPAGNE, SWITZERLAND

THE little Swiss village of Champagne, whose name dates back to the ninth century, has been producing wine for at least 350 years.

But in a bizarre twist to a row that threatens to derail a new global trade agreement, the villagers are unable to label their wine Champagne.

That is reserved for the sparkling wine produced in the French region of the same name - a right so jealously guarded that France even inserted it into the Treaty of Versailles that ended World War One.

"In this village we no longer have the right to use our own name," said Thomas Bindschedler, spokesman of the Swiss village action committee. "In a market where consumers are increasingly concerned with the accountability of producers, that is fatal."

Differences between World Trade Organisation (WTO) members about the rules for such names or 'geographical indications' (GIs) now risk blocking an outline deal in the long-running Doha round of trade talks at a hoped-for meeting of ministers on a date to be set for the coming weeks.

In Europe, many wines, and some foods such as cheeses, are associated with a particular region or 'terroir', where climatic or soil conditions and traditional working methods can lend the product a special quality.

Many countries protect the names, or appellations, of these regions as a brand, whose abuse could mislead consumers.

The Doha round includes drawing up a register of wines and spirits where regional names such as Champagne and drinks specifically linked to one country, like Mexico's tequila, would be strictly protected. The European Union and Switzerland - both big food importers which are being asked to open up their markets in the Doha round - want compensating gains to show their farmers.

"We cannot pay the maximum bill in agriculture without having something in return," said Mr Luzius Wasescha, Switzerland's WTO ambassador.

All in all, "Friends of GIs" amount to about one-third of the WTO's 151 members, including the 27 EU states.

The issue is particularly important for food producers in southern EU such as Italy and Spain. Several developing countries also support GI extension.

Thailand produces high-quality rice, and India produces valuable rice and tea, which they would like to see protected.

But many new world countries - ranging from the Americas to Australasia - are wary of agreeing to the EU's approach. They fear the EU could simply place a regional product on a GI register, and the onus would be on producers in other countries who use a similar name to justify it.

It will be difficult to get ministers to agree at the forthcoming meeting, unless the EU agrees to something less strict on the register of protected names or more concessions in agriculture, trade diplomats say. Moreover, negotiating GI registers and trademarks is much harder than negotiating tariffs and subsidies.

"You can split a tariff," said one new world diplomat. "You can't split the difference on intellectual property systems." - REUTERS

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