[Ip-health] Healthcare: India mustn’t give in to US policy pressures

Shailly shailly.17 at gmail.com
Mon Apr 30 01:14:31 PDT 2018

 T+ T-
Never mind Special 301 and GSP, govt must place its citizens’ health above
trade interests

Applying trade measures to arm-twist the domestic industry in different
countries is an of-used strategy that has the support of the United States
trade policy. And the Special 301 report expected later this month and the
General System of Preference (GSP) are tools in this armour.

The Special 301 Report classifies countries into three groups of priority
foreign countries (PFC), priority watch list and watch list, on the basis
of inadequate intellectual property protection and enforcement, as seen
from a US industry perspective. As a result, countries like India that
fully comply with the more international TRIPS Agreement do not find a
favourable mention in the report.

The US Trade Act obligates the government to enter into negotiation with
country/s in the PFC list and impose trade sanctions in case of failure of
negotiation. Such unilateral actions in a post-WTO era are illegal. In
fact, the US had provided a written undertaking that it would not resort to
unilateral action without informing the WTO Appellate Board. And yet it
continues to use its pressure tools. In any case, the US can use only the
withdrawal of GSP or the concessional import tariff provided to exports
from certain least developed and developing countries, as a trade sanction
under Special 301.

India is an almost permanent name on the Priority Watch List due to its
development-friendly IP laws. However, in 2014, there was an orchestrated
campaign to include it in the Priority Foreign Countries list citing
granting of compulsory licence and the curbs on patenting of the known
substance, as reasons. The setting up of a bilateral mechanism between
India and the US to discuss IP in 2014 eased some of the pressure on India.
In the build-up to this year’s Special 301 report, the submission of PhRMA,
the Big Pharma lobby recommended continuation of the Priority Watch List
status to India, citing inadequate patent protection, the absence of data
exclusivity, price control mechanism, high import duties, etc. Its concerns
on the Indian Patents Act also include its emergence as a model law. The
submission states: “is this a concern in the Indian market, but also in
other emerging markets that may see India as a model to be emulated”.

The US industry is also using review of GSP to exert pressure on India
against price control. The medical devices industry approached the US Trade
Representative in 2017 October demanding the partial or full withdrawal of
GSP in the light of price control on cardio-vascular stents and knee
implants. On April 12, the US Trade Representative (USTR) announced the
review of India’s GSP eligibility criteria. The communication clearly
stated that the move is on the basis of complaints received from the
medical devices and dairy industry. And interestingly, the press communique
was issued after the USTR’s visit to India.

Retaliation strategy

Data shows that price control affects the high margins of hospitals and not
medical devices manufacturers. But the market-oriented US industry seems
oblivious to such practices that facilitate the exploitation of patients.

A review or withdrawal of GSP can affect some exports from India. Even
though the difference average between GSP tariff and non-GSP tariff is only
4 per cent, some products receive huge concessions. At this point,
Government of India should carry out an analysis of the cost of GSP
withdrawal. Further, India could also explore a retaliation strategy such
as hiking tariffs on certain products coming from the US, like Harley
Davidson bikes and almonds, for example.

With this being the reality of the international trade arena, the Centre
needs to place its citizens’ health above trade interests and uphold its
constitutional obligation on the right to health. The Special 301 report
and other policy pressures aside, trade will learn to work with a country
within its framework for public health. And that’s something the Indian
government needs to always keep in mind.

*The writer is with the Third World Network *
Shailly Gupta
+41 792031302

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