India, U.S. will weather trade disputes: Farrell

At loggerheads:Trade disputes abound and many have been referred to the WTO. A view of WTO headquarters in Geneva, and the entity’s logo, right. — FILE PHOTO: REUTERS.  

The Indo-U.S. relationship is unlikely to be affected by disputes the two countries are having at the World Trade Organization (WTO), according to a senior U.S. Department of Commerce official, Diane Farrell.

Ms. Farrell’s comments to The Hindu, made at an India-U.S. business conference organised at the University of California Berkeley’s Haas School of Business, came within hours of an announcement at the WTO that the U.S. will seek sanctions against India on a poultry dispute. [Ms. Farrell herself was initially unaware of this announcement]. The U.S. 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 U.S. on public health grounds. “The relationship is strong enough to withstand any of these individual cases and both countries know and recognise that,” Ms. Farrell said. “Having the WTO as an arbitrating body is a positive for both countries in terms of maintaining an appropriate level of the relationship while resolving individual disputes. Overall, there is no question … on the basis of the financial growth the relationship has enjoyed, we are on an excellent track for a very positive future.”

Trade irritants

Despite growing strategic closeness, the U.S. and India have had several irritants in their relationship on the 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 U.S.’s application fees for H1B and L-1 category visas.

Additionally, the United States Trade Representative’s (USTR) Special 301 Report for 2016, which is its annual assessment of the state of intellectual property (IP) rights in other countries, 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 Trade Related Intellectual Property Rights (TRIPS) and has resisted ‘TRIPS Plus’ requirements in international trade deals.

“Whatever the law [IP law in India] in place currently is, it is in line with TRIPS. All we are asking is to not move it to TRIPS Plus which is what the U.S. is seeking,” Satish Reddy, Chairman of Dr. Reddy’s pharmaceutical company told The Hindu on the sidelines of the Berkeley conference. The pharmaceutical industry is also concerned about multilateral trade deals like the Regional Comprehensive Economic Partnership (RCEP) and Trans Pacific Partnership (TPP) whose ‘TRIPS Plus’ standards may eventually become the norm for all multilateral trade agreements. The U.S. 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. “[The] first step is clearly to deal with this Special 301 situation – I think that’s the burning fire right now,” Mr. Reddy said.

India has repeatedly asserted that its IP laws are compliant with standards mandated by the WTO’s TRIPS