India keen to add remedial clause in trade agreements

Written by Ronojoy Banerjee | Ronojoy Banerjee | New Delhi | Updated: Sep 4 2010, 05:59am hrs
Wary of third party free trade agreements (FTAs) impinging upon the countrys interests, New Delhi is keen on inserting a remedial clause in all its extant and future FTAs.

According to top government sources, India is looking to send out a stern message to its trading partners that if they enter into similar trade agreements with third parties it should not compromise the coutnrys interests.

This has been prompted by reports of constant seizures of Indian drugs by the EU Customs countries and the subsequent formation of the Anti-Counterfeit Trade Agreement (ACTA) for the imposition of stringent norms for generic drugs over and above the ones prescribed in the WTOs TRIPS agreement.

Currently Korea is negotiating a trade agreement with Japan which is expected to incorporate TRIPS-plus conditions on trade especially in the context of pharmaceutical products since both the countries also form a part of the ACTA grouping.

Since India enjoys a CEPA with Korea, it fears that new standards would automatically apply to India as well thereby restricting its trade with the country.

We do not want the TRIPS-plus conditions to be imposed on us...we are just looking to safeguard our interests, a senior commerce ministry official said on the condition of anonymity.

He said though initially the new clause would be only restricted to intellectual property rights (IPR) related issues, but in the future it can be used against other market access related issues as well. If we enter into an FTA with a country expecting certain privileges in the form of market access and then that country enters into another agreement with someone else then we need to ensure that our market access is protected, an official said.

The move by India could also force its trading partners to consult New Delhi at the time of signing an agreement.

There should be clear communication from the side of our trading partners if and when they choose to shell out something extra for other countries, the official added.

Head of trade at industry chamber CII Pritam Banerjee said that the move is welcome and a step like this ought to have been taken a long back.

India needs to safeguard its interests and thats only would be reciprocal in nature which India will have to keep in mind. But overall in the current context of global trade such safeguard mechanisms are very important, he said. Banerjee said that in a similar clause has been inserted in the US-Singapore FTA as well. A senior trade expert said that the attempts by India to incorporate such clauses was reflective of the growing clout of India in global trade. Though Indias percentage is still about 3% in the global trade but because it offers a big market it is in a powerful negotiating position now, he said.