Federal government’s czar for Commerce took to social media last week to announce filing of Pakistan’s Notice of Opposition to India’s claim of exclusive rights to the origin of basmati rice. Earlier in September, the next-door frenemy had filed a Protected Geographical Indications (PGI) claim at the European Union’s eAmbrosia register. Has Pakistan successfully managed to ward off the attack by an increasingly hostile neighbour?
First, it needs to be made explicitly clear that this is only a start of what – in all likelihood – will be a very protracted battle. The Notice of Opposition only signals Pakistan’s “intent” to take legal recourse against Indian claim. According to domestic media, the Notice of Opposition has been acknowledged by EU in the nick of time, as EU rules allow up to 90 days for acknowledgement since the filing of the original PGI claim. However, the eAmbrosia register does not list Pakistan’s notice in its online database, whereas Indian claim is available for public access since at least September 12th.
Why will the battle be prolonged? It is worth reproducing a section of Commerce Advisor’s quote: “We assure the rice community that we will defend our case with due diligence and commitment”. Moreover, as per news reports in international media, the country has employed the services of a Brussels based legal firm Altius to dispute Indian claim. Suffice to say that the opposing side has carefully crafted this attack and, will not cow down to filing of a mere Notice of Opposition. (For more, read “Basmati: what is at stake, published by BR Research on October 08, 2020).
Two, it is paramount that this modern form of trade warfare is nipped in the bud immediately. The Commerce czar raised concern that India may also be considering registering PGI claim for Pink Himalayan Salt as well. And he is right. The attacks won’t stop here: the extent of cultural overlap, shared history and heritage, and commonalities in goods traded by both countries mean that from Multani Mitti, to Peshawari Chappal, all goods historically originating from subcontinent may be at risk. It doesn’t help that given the sheer size of Indian economy and its greater productivity, the trade numbers will almost always be on its side.
Will Pakistan succeed? While taking legal recourse has ensured that basmati exports will probably remain unaffected in the near term, it is not easy to be optimistic. It is worth remembering that Pakistan finally promulgated its GI law only in March 2020, whereas the opposing country operationalized its law two decades ago, and has already successfully registered PGI for Darjeeling Tea back in 2011. Moreover, as far as basmati is concerned, India has buttressed its claim by demarcating unique regions of basmati origin domestically by excluding historically non-basmati growing regions such as Madhya Pradesh from its claim at EU. (For more, read “Basmati Exports under threat”, published by BR Research on October 01, 2020).
Because Pakistan’s legislature is two decades too late to the party, it has so far been unable to draw any such demarcation locally. Doing so right now – smack in the middle of a transnational lawsuit – may be akin to opening a can of worms. While limiting Pakistan’s claim of unique regions of origin to historic basmati bowl of Kalar – as explained in this space previously – will most certainly add weight to its claim, it will also result in taking domestic differences over the designated region, public.
According to Agricultural Statistics of Pakistan, cultivation of basmati rice has now not only spread outside of Kalar region to all the way down to southern Punjab, but also includes some recent additions from Sindh and Balochistan. Even if the minor cultivation in the latter two provinces is excluded, regional farmers from central and southern Punjab will not take it lightly if the demarcation is to their detriment.
How should the MoC and IPO modulate its strategy? Target the opposition where it hurts the most. While EU may very well be Pakistan’s trading partner, the trading bloc’s total basmati imports at $400 million dwarfs in comparison to other regions such as Gulf (excluding Iran) that import up to $3 billion worth basmati rice annually, more than 80 percent of which is from India!
Worse still, Pakistan’s other (less than friendly) neighbour Iran imports basmati rice worth more than $1 billion from India annually, whereas Pakistan’s basmati export to this western neighbour (with which it shares a thousand-kilometre-long border) is less than an embarrassing trickle.
While the Gulf countries may be increasingly becoming closer to the Indian hegemon, it does not take an international relations specialist to figure out that even if India wins the battle, Iran is least likely to follow EU definitions. With MoC’s support, Pakistani exporters must target the world’s largest importer of basmati.
Even if it captures one-third of that neighbouring market, it will more than compensate for the loss of EU (excluding UK). In the long run, in order to insulate Pakistan’s already paltry exports of other commodities from future PGI trade warfare, the country must get its legislative house in order. In absence of local regulation on demarcation of unique origin regions, it will be hard to ward off attacks on other commodities as well. Afterall, a Peshawari chappal originating from Karachi will be as dubious in its origin as one originating from Mumbai. Act fast.
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