India questions US at recent trade policy review: H-1B visas, IPR policies, priority watch list on the agenda

India recently asked the United States more than a hundred questions on its trade policy, H-1B visas, intellectual property rights (IPR) policies, and enquired whether the US’ Special 301 report – that places India under a ‘priority watch list’ – is international trade rules-compliant, a document has revealed.

India asked 152 questions and six additional queries to the US during its trade policy review (TPR) held in December last year, the room document of the review accessed by Firstpost reveals.

TPRs are an exercise, mandated in World Trade Organisation (WTO) agreements, in which member countries' trade and related policies are examined and evaluated at regular intervals. This was the US’ 13th TPR at the world trade body.

The first nine questions were on US policy, specifically on L-1 and H-1B visas: If the US has trade commitments for “intra-corporate transferees” and “speciality occupations” under WTO rules then it was asked to “to confirm” whether L-1 and H-1B visa holders in these occupations fall into these two categories of employees mentioned and to “explain” the legislative objective and purpose of the two types of visas.

It was then asked to explain categories of temporary, non-immigrant visas other than L-1 and H-1B visas given and the rationale behind the visa fee hike for L-1 and H-1B visa types and whether the fee hike was supported by any “research, survey, data, study, analyses or other document”.

Representational image. News18

Representational image. News18

India then asked how the limit of ‘50 employees or more’ as regards to the increased fees was decided upon and why it didn’t apply to other categories of temporary, non-immigrant visas.

The US did not answer any of the above-mentioned queries and merely said that the matter is under consultation at the WTO and directed New Delhi to look up the websites of the US Department of State and US Department of Homeland Security for more information on US visa categories.

Washington revealed that it had procured $10.2 billion of IT services in the year 2010, when India asked a question on the total value of IT services procured during 2014 and 2015, and the percentage procured from foreign suppliers.

New Delhi then asked if by imposing an internal tax or charge on imported products only, was the US violating the GATT 1994 rules. This situation was described by the US as “hypothetical”.

The questions, that run into about 33 pages, also focus quite a bit on intellectual property (IP) rights and patent issues. IP was present in some 52 percent of US goods exports, Washington’s response revealed.

IP-intensive industries accounted for $6.6 trillion in value added in 2014, up more than $1.5 trillion (30 percent) from $5.06 trillion in 2010. Accordingly, the share of total US GDP attributable to IP-intensive industries increased from 34.8 percent in 2010 to 38.2 percent in 2014.

“This does not even cover the industries that heavily rely on other forms of IP protection, such as trade secrets, which also contribute substantially to the economy,” the US said.

The stock of foreign direct investment (FDI) in the US totalled $3.1 trillion in 2015, up from $2.3 trillion in 2010, the responses reveal. In manufacturing, this stock increased from $757 billion to $1.2 trillion, roughly 55 percent of the overall increase. The chemical industry – mostly pharmaceuticals – accounted for more than two-thirds of the manufacturing increase.

“What is the procedure for issue of these compulsory/mandatory licenses? Do they apply irrespective of the field of technology?” India asked.

Compulsory licensing is when a government allows someone else to produce the patented product or process without the consent of the patent owner. It is one of the flexibilities on patent protection included in the WTO’s Trade-related Aspects of Intellectual Property Rights (TRIPS) agreement.

“The United States does not accept the characterisation of the legal provisions referenced in this question,” the US replied.

In the chapeau text of another question, India said that the American government “has remedies beyond legal provisions, to ensure that an action which is beneficial to the larger interest of the US economy and its consumers is taken” and that “Executive Orders of the President can be issued to address specific situations and to overturn determinations made by judicial bodies.” Can the concern that forms the basis of the decision go beyond health urgency and public safety? India asked. The question has “inaccurate assertions” the US replied.

The enactment of the Trade Facilitation Act by the US early last year can lead to imposition of sanctions if the countries categorised under "priority watch list” (PWL), under the Special 301 report, do not provide "adequate and effective" protection of IP rights or "fair and equitable market access to US persons that rely upon intellectual property rights," India stated.

India along with China, Russia and eight other countries continue to be PWL countries in the US’ Special 301 report – a Congressionally mandated annual report that has been issued every year, beginning in 1989, that identifies trade barriers to US companies and products in foreign shores due the host country’s intellectual property laws, including trademarks, patents, copyright, trade secrets etc.

“Since under World Trade Organisation jurisprudence, legality of unilateral actions over sovereign countries is questionable, does this domestic legislation of the US not go beyond the provisions of WTO?” India asked.

To this, the US, without referencing the WTO-compliance question, simply said that enforcement of IP rights supports high-paying jobs and provides global solutions, including providing new and improved medicines and health treatments.

The US invokes the Special 301 provisions “to try and influence other countries' IP laws, which are TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights) compliant and are domestic in application,” New Delhi said.

Referencing the many recommendations of the United Nations Secretary-General's High-Level Panel (HLP) on Access to Medicines report issued in September 2016, India stated that one of the recommendations specifies that countries "must refrain from explicit or implicit threats, tactics or strategies that undermine the right of WTO members to use TRIPS flexibilities."

Under such circumstances, is the Special 301 report TRIPS compliant? India asked.

The assessments in the report “where relevant” are based on the Doha Declaration on the TRIPS Agreement and Public Health and that the US “respects a trading partner's right to protect public health and, in particular, to promote access to medicines for all”, the US replied.

Persisting on its questions on patents, India asked the US on its views on evergreening of patents – any legal, business and technological strategy through which producers extend their patents over products that are about to expire – considering that the US itself restricts or invalidates patents on the basis of "secondary considerations". This question was also posed in the context of the UNHLP report that recommends countries use methods to prevent evergreening of patents.

The US said that there is no common understanding of the concept of “evergreening”.

“Certain countries, including India, have applied patentability criteria, including through the application of India's Section 3(d) "enhanced efficacy" standard, in a way that has led to rejections of patent applications for innovative pharmaceutical products that have received patents in other countries,” the US complained.

Section 3(d) of the Indian Patent Act 1970, amended in 2005, does not allow a patent to be granted to inventions involving new forms of a known substances unless it differs significantly in properties with regard to efficacy. This has been a major cause of concern for powerful American pharmaceutical companies.

Additionally, Washington is “deeply disappointed” with the UNHLP and its recommendations and said that the “narrowly-focused mandate” of the panel was flawed and did not produce outcomes that adequately address the complex issue of access to medicines.

Citing a recent German court verdict of granting a compulsory licensing (CL) to an American company, India asked the US if such a CL was justified and how the US differentiates such CLs issued in in favour of US companies from those issued in other countries to non-US companies.

“There is no contextual information provided in this question, and it appears is more appropriate for Germany or the European Union,” the US retorted.

“The US not only wants a double standard on compulsory licensing, they want everyone to agree that the double standard does not exist.  It is a form of lying, justified by the US power. It's embarrassing,” Jamie Love, an expert in compulsory licensing cases and founder of the well-known American NGO Knowledge Ecology International told Firstpost.

India also asked the US how it proposes to impose high duties on Chinese goods, when its average bound rate of duties is less than 5 percent.

The US replied that the TPR is a retrospective review and that it will keep the WTO members informed when the new administration comes in place.

The US TPR was held on 19 and 21 December at the WTO headquarters in Geneva, with more than 60 delegations taking the floor to comment or provide written statements on US’ trade measures.

India, along with China, the EU, Japan, South Korea, and Taiwan were some of the trading partners most affected by the US’ anti-dumping measures, the TPR documents reveal.


Published Date: Feb 20, 2017 12:09 pm | Updated Date: Feb 20, 2017 12:09 pm

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