GIs bring about several beneficial effects not only for producers, but also for consumers and local communities. In presence of a product whose unique qualities depend on its geographical origin, setting-up a GI can have a positive impact on the production and employment within the region, allowing producers to market the product at a premium price (consumers are ready to pay such a price in exchange of the quality “certified” by the GI), as well as to allow a better income distribution throughout the whole production chain. Moreover, GIs encourage the diversification of production, representing an excellent tool for market access. In a global market context, consumers are more and more looking for unique quality products. Thanks to GIs, consumers can benefit from a wider range of choice and diversity. Likewise, by preserving traditional productions, GIs contribute to avoid the standardisation of food products.
GIs have long been considered exclusively as a European phenomenon. However, developing countries have an important potential in that field. Numerous cases of geographical names, either already protected in their country or in the process to be recognized, such as “Colombian coffee”, “Argan oil” from the Souss Massa Draa region in Morocco, “Phu Quoc” from Vietnam, “Blue Mountain coffee” from Jamaica, “Pochampally Ikat” – a textile from the Indian State of Andhra Pradesh, “Pisco” from Peru, “Quinua Real de Lipez” from Bolivia, "Hereke” a specific carpet from Turkey, and many others, show that GIs can create wealth and add value in developing countries.
GIs as marketing tool for agribusiness and handicraft products
Unlike other intellectual property rights, like patents and trademarks, which require innovative knowledge and a technology capable of industrial application, GIs are generally based on a minimum level of innovation. Developing countries are rich of this kind of traditional knowledge, generated and transmitted over generations. An appropriate use of the GI scheme can help theme transform this knowledge into marketable products and reach out international markets. Moreover, poor countries have a competitive advantage in labor-intensive sectors such as agriculture and handicrafts. Through GIs (which by definition apply to these sectors), producers of generic goods in developing countries can turn into exporters of high-quality agribusiness and handicraft products.
Spill-over effects” over the economy
GIs have the potential to generate positive effects on the overall economy of a country (employment, creation of opportunities in other sectors such as tourism, prevent rural exodus, etc.), the protection of the environment, gender issues, preservation of traditional knowledge and biodiversity, etc. These questions have a strategic importance for developing countries. For instance, following several studies, “UNCTAD Biotrade Initiative” concluded that, more than other major types of intellectual property, GIs have features that respond to norms for use and management of bioresources and traditional knowledge that are characteristic of the culture of many indigenous and local economies. Furthermore, GIs have the potential to contribute to the protection of the environment. The “Argan tree” in Morocco (used in the production of Argan oil), contributing to stop the process of desertification in the region of Souss Massa Draa, explains well this component.
Another advantage for developing countries is the opportunity offered by GIs to prevent the delocalization of production. A GI can only be produced in a given area which confers the product – by virtue of its climate, “terroir” or human factor – its specific characteristics. As a result, big corporations are restricted from “capturing” the added-value of traditional products and related methods through the appropriation of these techniques and the production of the goods outside the area of origin.
“Collective rights” and income distribution
GIs represent a specific case of intellectual property right. GIs do not confer individual rights (such as in the case of patents and trademarks) but rather “collective rights”. In such a case, the right over a geographical name does not belong to a single company, but to all producers in a given geographic area that respect a specific code of conducts. This type of right fits particularly well the social structures of developing countries, where the community often plays an essential role, and has a tremendous potential in terms of income distribution. For small producers of developing countries, GIs present other additional advantages over trademarks (again in the interest of small producers in developing countries): lower registration costs and no need of renewal; the possibility to protect a geographical name without the need for it of having acquired a distinctive character; lower costs and more effective enforcement mechanisms; stronger protection against the use of the name in translation and/or with expression such as “like”, style”.
Economies of scale for small producers
A “collective” approach among producers and various actors of the value chain is needed to create and develop a GI (e.g.: to define production standards, set-up a common platform for the GI management and to agree on governance rules of the association of producers, deal with quality control issues, elaborate common marketing strategies). This generates economies of scale that are beneficial for producers, especially for small structures that do not have a critical mass to carry out the above-mentioned activities on their own.
“GIs as a light monopoly”
GIs are a peculiar type of intellectual property asset. The monopoly over a geographical name is not an exclusive right over a certain category of products, like in the case of patents. The producers of “Coffee of Kenya” are not entitled, neither wish, to prevent others from producing coffee. The right conferred by the GI is limited to banning competitors outside the defined geographic area (or inside the geographic area for those not respecting the code of conduct) from using the name “Kenya” in connection with their products. There is no factual link between a stronger legal regime for GI protection and reduced competition in the international trade of food-staff and other origin products. GIs present limited risks of reducing competition in the marketplace, and have rather the potential to promote competitive behaviors among producers keen to differentiate their offer of goods through improved quality. Consumers also benefit from GIs as they reduce transaction costs in their search for “niche products”.
 See Impact of a Geographical Indications on Agriculture and Rural Development, Comté Cheese, available at: http://www.origin-gi.com/