Troubles with trade

India needs to redouble efforts at the WTO

Last week WikiLeaks raised a corner of the curtain of secrecy that has till now covered negotiations by 12 countries, including the United States, that make up the Trans-Pacific Partnership (TPP) to finalise a new "high standard" free-trade agreement in order to address what they see as key trade issues in the current century. The website published the complete draft of the treaty's intellectual property rights (IPR) chapter, which tended to confirm concerns expressed by several activists and commercial interests over what had been brewing. It is important to notice this is just a draft; the agreement has not yet been finalised. Also, important Pacific Rim countries, such as China, Korea, Indonesia and Thailand, are not part of the grouping. But while the writ of the final version of the agreement may not run through the entire region, it can still cause trade friction to rise. In the absence of a multilateral agreement resulting from the successful conclusion of the Doha round, exclusionary regional trade agreements have naturally been moving ahead.

Some have expressed concern that the TPP draft agreement has gone too far in acceding to demands by the private sector on environmental, intellectual property rights (IPR) and labour regulations. However, not all the concerns of those most vocal against the treaty are aligned with India's. For example, India does not suffer from serious disquiet over globalisation or multinationals per se, and is a beneficiary of outsourcing - which is stoutly opposed by many who are against the treaty in developed countries. India is also on board with the need to protect copyright laws that seek to curb film and music piracy and misuse of proprietary software.

Some in the Indian pharmaceutical sector, however, will object to the wording of the proposed draft with respect to patents and generic drugs and active pharmaceutical ingredients that go into making them. The organisation Doctors Without Borders/Medecins Sans Frontieres, which has often allied with India's generic pharmaceutical industry, has claimed that the treaty, if implemented in its present form, will extend the monopoly protection of high-priced pharmaceuticals and delay the entry of affordable medicines by facilitating "evergreening" through incremental patenting. If such provisions gain ground, the role of Asian countries like India as global suppliers of generic drugs is likely to be jeopardised. It is also feared that this could harm the Indian pharmaceutical industry's capabilities in bolstering its export earnings and supplying affordable medicines to the poor. The Indian legal system protects IPR to reward innovation while preventing unjustified extension of patents. However, the Indian legal system has been a global outlier in this area. Thus, the TPP taking a different direction should not be a complete surprise. Meanwhile, Indian pharmaceutical companies, which have been a major contributor to India's exports, have largely failed to invest in the levels of research and development that would allow them to compete once IPR principles are applied more stringently across the world. What is worrying, however, is that in the service of Indian pharma, the government has been markedly unenthusiastic when it comes to multilateral trade agreements. The negative costs of this are now becoming apparent. India must strive for an equitable, fair, progressive and trade-friendly outcome to the Doha round of World Trade Organisation talks, beginning with a co-operative stance at the Bali negotiations later this year.