Avoids stringent ‘Priority Foreign Country’ tag for India
Disregarding an orchestrated campaign by sections of Corporate America over the past few months — the Obama administration has steered clear of designating India as “Priority Foreign Country” — a move that could have triggered US trade sanctions and Indian retaliation.
While avoiding this extreme step, the Office of the US Trade Representative has, however, retained India on its Special 301 Priority Watch list of 10 countries, voicing “growing concern” over the environment for the protection and enforcement of Intellectual Property Rights (IPR) in all these countries.
India, along with China, Russia, Pakistan and several other countries, have been on the Priority Watch list for the past several years.
The 10 countries on the “Priority Watch list”, including India, will be the “subject of particularly intense bilateral engagement during the coming year”. Twenty-seven other countries are placed in a second category “Watch list”.
Releasing the 2014 Special 301 report on Wednesday, USTR Michael Froman announced that his office would conduct “out-of-cycle reviews” to promote engagement and progress on IPR challenges identified in the reviews of India, Kuwait, Paraguay and Spain.
“The Obama Administration is committed to meaningful and sustained engagement with trading partners — from China to India to Canada — with the goal of resolving intellectual property-related concerns so that Americans and American firms can compete on a level playing field in those markets,” Froman said.
In recent months, a host of American corporates and business groups have been demanding that India be designated as a “Priority Foreign Country” for its alleged refusal to protect key pharmaceutical patents, besides IPR violations in other sectors.
Such a designation is rare (Ukraine being the only country so designated over the past eight years), yet the business groups waged an unrelenting campaign. The US Congress also chipped in, prompting the US International Trade Commission to institute a larger enquiry into India’s “protectionist” economic policies and IPR regime.
Announcing India’s retention on the Priority Watch list in 2014, the report said the United States recognizes not only the concerns, but also the critical role that meaningful, constructive and effective engagement should play in resolving them.
“Serious difficulties in attaining constructive engagement on issues of concern to US and other stakeholders have contributed to India’s challenging environment for IPR protection and enforcement,” it said, adding that in the coming months, the US will “redouble its efforts to seek opportunities for meaningful, sustained, and effective engagement on IP-related matters with the new government”.
To further encourage progress on IPR issues of concern, it said the USTR will publish a Federal Register notice and initiate an Out-of-Cycle Review of India in the fall of 2014, commencing an assessment of the progress in that engagement.
It noted that India made “some limited progress” in 2013 in improving its “weak IPR legal framework and enforcement system” by implementing the Madrid Protocol and making progress toward digitization of cable networks to help efforts to combat signal theft by cable operators and enacting rules to implement amendments to its Copyright Act.
The USTR report has urged India to take specific actions to address the concerns through constructive bilateral engagement, including strengthening the judicial enforcement machinery for IPR violations.