In signs that India and the US are becoming more amenable to each other’s concerns on the trade and economic front after a recent understanding that ended an impasse on World Trade Organisation talks, the two sides will announce a few key policy priorities aimed at deepening their engagement on Tuesday.
While New Delhi has specifically been urged by the US to bolster intellectual property rights (IPR) in the pharmaceutical sector and steps to avoid unfair commercial use of R&D data made available by US companies to Indian regulators, India is keen to ensure support for its “Make in India” campaign. India has commenced a review of its IPR policy, although it hasn’t stated whether this will need a rethink on the additional filter of satisfactory improvement in therapeutic efficacy for patents, over and above the TRIPS criteria of novelty and inventive step.
On IPR, the US had in its April 30 Special 301 report (an annual review of the global state of IPR protection and enforcement) classified India as a ‘priority watch list country’ after finding that India’s IPR protection and enforcement environment had “deteriorated”.
Ahead of the ministerial-level meeting of the Trade Policy Forum (TPF) on Tuesday, officials of India’s commerce ministry led by commerce secretary Rajeev Kher and those of the US led by deputy US trade representative Robert Holleyman on Monday had a round of talks on trade- and investment-related issues. The TPF, which is meeting for the first time since 2010, is the top bilateral forum for discussion and resolution of trade and investment issues. Sources said during the Kher-Holleyman talks on Monday, the issue of piracy of Hollywood movies also figured.
New Delhi, sources said, raised issues such as the totalisation agreement (on social security of professionals), market access in the US for India’s agricultural products such as mangoes and grapes, and protection of its traditional knowledge. It also pitched for more investments from the US in its proposed smart cities and national investment and manufacturing zones.
Further progress on these issues is expected in the meeting on Tuesday where the Indian side will be led by commerce and industry minister Nirmala Sitharaman and the US team by US trade representative Michael Froman.
On the WTO talks, Prime Minister Narendra Modi recently got the US agree to the changes India wanted in the multilateral regulation of food subsidy mechanisms of countries. Subsequently, US President Barack Obama agreed to be the chief guest at this year’s Republic Day celebrations, the first US president to grace the occasion. While India had not breached the WTO limits on food subsidies, it blocked the trade facilitation agreement (TFA) in July on the grounds the WTO rules were archaic and hurt the interests of countries like India.
Speaking at Ficci on Monday, Froman described unlocking progress at the WTO as “a big deal”, adding that the TFA will be effective in reducing the cost of doing business for developed countries by 10% and that for developing countries by 14%, adding billions of dollars to the world economy. “I just got a message from my deputy in Geneva who indicated that India and the United States are working side by side as we speak, literally, today in Geneva to build support among the other WTO members for the package of agreements that we agreed to.”
The India-US agreement regarding WTO talks makes clear that a mechanism (peace clause) under which WTO members will not challenge such food security programmes under WTO dispute settlement procedures will remain in place until a permanent solution regarding this issue has been agreed and adopted.
Pointing out that in order to avail the ‘peace clause’ India and other developing countries will have to submit a detailed report on how they manage their food security programme and that they are exceeding or are at the risk of exceeding the subsidy limits, Biswajit Dhar, professor, Centre for Economic Studies and Planning at the School of Social Sciences, JNU, said: “This (perpetual peace clause) is not a free lunch. It comes with a set of conditions which takes the form of an annual reporting system. If those conditions are not met with, you could be hauled up (at the WTO).”