In an orchestrated campaign at a time of worsening commercial relations, Corporate America is urging the US Government to designate India as a “Priority Foreign Country” in retaliation for its alleged trade discrimination measures and failure to enforce intellectual property rights.
A “Priority Foreign Country” designation is seen to be the worst classification given to foreign countries that deny “adequate and effective” protection of intellectual property rights or “fair and equitable market access” to US persons relying upon IPR protection under the US Trade Act. At a hearing on Monday, preparatory to the US Trade Representative’s annual Special 301 report, representatives of American industry and advocacy groups argued that such a designation of India is necessary to “secure a fair and level playing field for (American) manufacturers and workers”.
“This designation appropriately would rank India among the very worst violators of intellectual property rights and establish a process leading to concrete solutions,” they said in a joint letter, claiming: “India’s systematic discrimination against US innovators and its growing theft of US intellectual capital demand no less.” The Office of the USTR will be coming up with its global Special 301 report around the end of April.
Separately, the US International Trade Commission is in the midst of an elaborate investigation of India’s trade and investment policies, following demands from US Congress on top of representations from American industry. Official sources in New Delhi have already indicated that India would drag the US to the World Trade Organisation in the event of such a punitive designation. According to them, India’s IPR regime is fully compliant with the WTO formulations.
In their letter to USTR Michael Froman, the business and advocacy groups asserted that India’s “discriminatory industrial polices, including its blatant disregard for intellectual property” were threatening American manufacturing and jobs. “Unfortunately, high-level dialogue and diplomacy have failed to reverse discrimination. Rather than engaged in good faith negotiations, India has expanded its industrial policies to other products and sectors. It continues to deny and revoke patents for innovative medicines manufactured in the United States and elsewhere,” the organisations claimed.
At the USTR hearing, Brian Pomper from the Alliance for Fair Trade with India alleged that “over the last 12 months, India has reached an inflection point both in terms of the egregiousness of its domestic policies and the belligerence of its international statements on IP protection”. “India has contributed to a climate for IP rights protection and enforcement that consistently ranks worst or among the worst in the world. The USTR and other federal agencies must consider elevation to Priority Foreign Country,” said the National Association of Manufacturers’ Vice President of International Economic Affairs linda Dempsey.
The Intellectual Property Owners Association accused India of systematically denying US companies the protection and opportunities afforded to Indian industries, including with respect to IPR. “These efforts not only threaten to diminish India’s ability to innovate and attract investment, but they also unfairly disadvantage American businesses,” said Executive Director Herb Wamsley. He also complained of India’s “extreme delays in the handling of oppositions, cancellations and most court actions, all of which may permit infringements to continue without redress for lengthy periods of time”.