Decision to be mentioned in the text of the FTA.
India and the European Union (EU) seem to have finally buried the hatchet regarding the quandary surrounding the agreement on the Trade-Related Aspect of Intellectual Property (TRIPS), which had raised widespread concerns on India’s ability to export generic drugs to the poorer countries and its credibility as the ‘pharmacy to the world’.
Both sides are learned to have reached the consensus during Commerce and Industry Minister Anand Sharma’s visit to Brussels last month to meet EU Trade Commissioner Karel de Gucht, where the issue was discussed at length behind closed doors.
Both Sharma and Gucht have also decided that this decision would also be categorically mentioned in the text of the free trade agreement (FTA) that is currently under negotiation. “Both parties went out of their way and sorted out the issue. It has been decided that the agreement will in no way limit India’s scope for developing and exporting life-saving drugs to other countries. It would also not stop India from using flexibilities under TRIPS agreement,” a senior commerce department official told Business Standard.
The problem started almost two years ago, when a generic drug shipment, en route from India to Brazil, was seized by the Dutch customs during transit, citing violation of European patent laws. But India had been insisting since then that the drug shipments were consistent with the agreement on TRIPS. Developing nations have criticised the move as a deliberate attempt by rich nations and multinational companies to diminish poor countries’ access to cheap medicines.
Consequently, earlier this year, India filed a complaint against EU at the World Trade Organization’s (WTO’s) disputes panel but both sides were asked to resolve the matter bilaterally with the help of consultation process. While EU has agreed to India’s stand, it remains to be seen what impact it would have on the dispute particularly as it is now a commercial dispute concerning the customs.
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EU is yet to officially announce the decision even as Prime Minister Manmohan Singh visits Brussels for a summit with the 27-nation bloc on December 10. Minister Sharma and Commerce Secretary Rahul Khullar will also accompany him. During the visit, a report on the progress made so far on the broad-based India-EU FTA is expected to be released.
Sharma and Gucht had also agreed to conclude the deal by the spring of 2011, while by March both were expected to initial the agreement, said the official. Initialling an agreement means when ministers from both countries in negotiation put in their initials agreeing to the terms after the talks wrap up. After this, EU would take up the deal with their Parliament for ratification. Simultaneously, India would have the deal receive green signal from the Union Cabinet. At this time, all the details of the agreement, including the cut in tariffs on various products, would also be announced.
According to the official, both Indian as well as European consumers would stand to gain from cheaper imports in different segments. Similarly, both would also benefit facilitating the temporary provision of services.
“We are in the last mile of the negotiations. The agreement is going to be highly ambitious and would not be confined only to duty elimination but would also cover trade in services, investment and regulatory issues,” the official said.
Both sides have also seemed to reach a compromise on some of the major irritants concerning the FTA, such as EU’s insistence on agreement on non-trade issues like environment, labour laws and child labour, among others.