India, US will weather trade disputes: Farrell

Background: India-US relations, Trade disputes, WTO, United States Trade Representative (USTR), Special 301 Report for 2016, Trade Related Intellectual Property Rights (TRIPS), TRIPS Plus, Intellectual Property (IP) rights, Regional Comprehensive Economic Partnership (RCEP), Trans Pacific Partnership (TPP), India Patent Act.

  • According to a senior US Department of Commerce official Diane Farrell, the Indo-US relationship is unlikely to be affected by disputes the two countries are having at the WTO.
  • His comments came within hours of an announcement at the WTO that the US will seek sanctions against India on a poultry dispute.
  • The US has sought a meeting at the WTO on July 19 to discuss a WTO ruling in its favour last year on India’s restrictions of poultry imports from the US on public health grounds.
  • Despite growing strategic closeness, the US and India have had several irritants in their relationship on trade front in recent months. These have included disputes that have been referred to the WTO, such as on India’s local sourcing requirement for solar panels and the US’s application fees for H1B and L-1 category visas.
  • Additionally, the USTR’s Special 301 Report for 2016 has kept India on a priority watch list. India has repeatedly asserted that its IP laws are compliant with standards mandated by the WTO’s TRIPS and has resisted TRIPS Plus requirements in international trade deals.
  • The pharmaceutical industry is also concerned about multilateral trade deals like the RCEP and TPP whose TRIPS Plus standards may eventually become the norm for all multilateral trade agreements.
  • The US has been pushing against India’s compulsory licensing laws for drugs in the interest of public health as well as against Section 3(d) of the India Patent Act which prevents patents from being taken out on a product unless its efficiency is significantly enhanced.
  • Getting India off the Special 301 watch list has therefore become a priority for the pharmaceutical industry.

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