Trade Rules

The verdict can only be that India must abide by the agreement and provide for exclusive marketing rights. If it does not, either the United States will be permitted to take retaliatory action against India, which could be in the highly damaging form of discrimination against Indian exports, or the WTO itself could take punitive action against India. This is the dire situation towards which the present government is hurtling; the victims will be exporters who have done nothing to prevent the extension of patent rights.

Instead of taking this laid-back attitude, the government specifically, the minister of commerce should take active steps to educate Parliament on the terrible costs of misguided nationalism. Parliaments poor comprehension of trade issues actually harms this countrys national interests.

 

This is just the beginning. The portents of what might come are in the National Trade Estimate prepared by the US Trade Representatives Office (USTRO) for India. The complaints it lists are horrifying. For instance, it alleges that Indian public enterprises have cashed the performance bonds of foreign companies even when there has been no dispute over performance. It says that the government invites bids from foreign companies, which they prepare at great cost; it then negotiates with local companies on the basis of the bids received, and gives Indian companies contracts at negotiated lower prices.

These complaints may not bother a government which is not looking more than six months ahead. But the basic thrust of the USTRO report is that India has excellent laws, which it administers arbitrarily; this surely reflects as much our own experience as that of foreign companies. The issue is not one of foreigners versus Indians, but of discrimination and lack of transparency. The testimony of S K Jain, whose diaries originated the vast hawala scandal, is about precisely this: how collusion between corrupt businessmen and politicians defeats the purpose of perfectly good government regulations. A domestic issue today, this will soon become an international issue as Indias importance in the world economy increases. This is the issue Parliament should urgently confront.