Business Today

Why India needs to watch Orrin Hatch

Topics of unfair trade practices and job creation and losses in the US will only attract greater attention and influential voices like senator Hatch will only be heard more carefully.

twitter-logo E Kumar Sharma        Last Updated: May 19, 2015  | 10:45 IST

E Kumar Sharma, associate editor, Business Today
Senator Orrin Grant Hatch, 81, is the most senior Republican in the United States Senate and also one of the most influential voices in America today. But this is not the only reason why India cannot afford to ignore what he says. It is also because he has been critical of India's trade policies. The concerns that he expressed are also in line with the issues raised by a fairly vocal section of the US pharma lobby about India and its policies. Consider his comments on April 30, immediately after the release of the Special 301 report of 2015 by the United State Trade Representative (USTR).

The report looked at the intellectual property rights issues and chose to retain India in its Priority Watch List and not downgrade it to Priority foreign Country, as has been sought by a section of the pharma and other industries in the US. If a nation is put in the category of Priority Foreign Country, then imports from that country into the US would not enjoy any trade preferences. In a statement, Hatch said the report fails to recognise India's intellectual property violations and is a "major step back in America's efforts to end such unfair trading practices."

Hatch, who is also the powerful Finance Committee Chairman in the US also added: "once again, the Administration has missed the mark....After squandering the opportunity to crack down on India's rampant IP violations in their Out of Cycle review last year, they have now issued a report that that fails to fully recognize the seriousness of India's harmful IP policies. This is major step back in America's efforts to end such unfair trading practices. At a minimum India should be kept under the microscope with another targeted investigation. This lack of progress is disappointing. We must refocus our efforts and keep pressure on India to follow the rules of the global trading system."

In fact, on this very point of seeking another targeted investigation, the Pharmaceutical Research and Manufacturers of America (PhRMA), which has some of the leading innovative biopharmaceutical research companies of US as its members, on the same day said: "We are disappointed USTR chose not to plan an out-of-cycle review (OCR) of India later this year. Such a review would have provided an important opportunity to take stock of progress and results."

As many who have been tracking the Indo-US trade issues would know, the US International Trade Commission (USITC) investigation into trade, investment, and industrial policies in India and their effects on the US Economy leading to its report in December last year was triggered by a request by Hatch and others. The USITC investigation was at the request of the US Senate Committee on Finance and the US House Committee on Ways and Means with Hatch and others as members of these committees. When the request was made in August 2013, for this investigation, Hatch was the "ranking member, Senate Committee on Finance." Today, he is the "Chairman of the Senate Committee on Finance," which is quite significant and important.

In the request letter seeking to investigate Indian industrial policies, it was pointed out, among other things that India "has applied its patent law in a discriminatory manner, particularly against innovative US pharmaceutical companies, so as to advantage its domestic industries." And also the ripple effect it could have in other geographies, as is evident by this statement in the request: "we are very concerned about the broader impact that India's trade policy may be having on the global trading system, both in terms of the model it is setting for the countries and the drag it is exerting on multilateral trade negotiations."

For the moment, India has averted the threat of any immediate downgrade from the Watch list to Priority Foreign Country. But, as is apparent, India needs to be on guard and strongly put forth its case on being TRIPS (Trade-Related Aspects of Intellectual Property Rights)-compliant and also quickly put in place the new national IPR policy that it has been talking about. Delays in this or signs of mixed signals will not be in India's interest especially at a time when the US is heading for elections. Topics of unfair trade practices and job creation and losses in the US will only attract greater attention and influential voices like senator Hatch will only be heard more carefully.

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