At a time when India-US relations are just limping back to normal after the recent month-long diplomatic spat over the Devyani Khobragade issue, the United States Trade Representative (USTR) was on Monday gearing itself up to announce a trade enforcement action relating to India.
“Ambassador (Mike) Froman will announce a new enforcement action with regard to India,” the Office of USTR said, without offering any details. Froman was scheduled to address a news conference 2 pm ET (12.30 Monday night India time). The US move is being seen against the backdrop of a strong demand from the US Chamber of Commerce last week to designate India as a “Priority Foreign Country” for possible trade sanctions over its alleged failure to protect intellectual property rights in the pharmaceutical sector.
US firms have been complaining that India is allowing its companies to produce cheap generic versions of medicines developed by American pharmaceutical giants that are still under patent protection. Separately, the US International Trade Commission (USITC) is slated to hold an extensive hearing on Wednesday and Thursday on India’s trade, investment and industrial polices in relation to their effects on the US economy.
The USITC, egged on by US lawmakers, had announced last August an elaborate investigation on the subject following representations from Corporate America that included sending out letters to President Barack Obama and Secretary of State John Kerry. The USITC has said its investigation will “enumerate restrictive trade and investment policies that India maintains or has recently adopted, determine which sectors of the US economy are most affected by these policies, and describe the competitiveness of Indian firms in these sectors”.
What was to have been a one-day hearing this week has been turned into a two-day affair “to accommodate the larger than expected number of requests to appear at the public hearing in this investigation”, said the USITC, which describes itself as an “independent, nonpartisan, fact-finding federal agency”. In its submission to the USTR last Friday, the US Chamber of Commerce justified its demand for trade enforcement action against India, asserting: “We highlight India as a country with particular challenges with respect to intellectual property protections. Because India has not shown a record of engagement on these issues and the environment has deteriorated significantly since last year, we are now recommending that India be designated a Priority Foreign Country.”
India already figures on the US Government’s Special 301 Priority Watch list for countries which, in Washington’s view, need to be closely monitored for their level of intellectual property protection.