United States’ 1999 assurance to WTO may help India’s IPR case.

NEW DELHI: An undertaking given by the United States to a WTO dispute settlement panel on unilateral trade action in 1999 may prove to be an important ammunition in New Delhi's hands if the Obama administration takes action against India on its intellectual property (IP) regime.

The US Trade Representative (USTR) is reviewing whether India's IP regime has deteriorated enough to warrant a downgrade in its status to 'Priority Foreign Country' list. This will allow the country to impose trade sanctions on India and a decision on downgrading is expected on May 1.

In a dispute with the European Union a decade-and-a-half ago, the US gave an undertaking before the WTO dispute settlement panel that it will only use its discretionary powers under section 301 and act in compliance with WTO rules and procedures, said government officials and experts.

"We are fully in compliant with WTO and not violating any international law. Therefore, there is no reason for us to be unduly pressurised or act in haste," a commerce department official said on condition of anonymity.

According to the rule, a country cannot take unilateral action against another member country which is inconsistent with the WTO laws, the official said. Indian government officials recently held a meeting to discuss the strategy over the special 301 report of the US.

US has till now refrained from imposing sanctions on Ukraine citing political instability, which was put in the 'Priority Foreign Country' list by the USTR last year.

pecial 301 is a trade and industry practices report that identifies intellectual property rights record of countries and lists countries that could face trade sanctions and other countries whose IPR regimes are deemed to be an area of lesser concern.

"The US cannot take any unilateral action against India. It will have to file a dispute in WTO, and if the dispute resolves in favour of US, it will have to seek authorisation from WTO, only after which it can take action against India," said Anwarul Hoda, a former deputy director general of WTO, currently with Icrier, a think tank. India was TRIPS compliant and granting of a compulsory license (CL) is not inconsistent with WTO laws, he said. "US normally puts countries in priority watch list to wield pressure on them."

Department of industrial policy and promotion secretary Amitabh Kant recently told ET that there was zero merit in the American case. "The American companies fear that other countries are replicating India's CL provision based on our experience," he said.

The WTO panel in 1999 also noted that "merely carrying a big stick is, in many cases, as effective a means to having one's way as actually using the stick."

"The threat alone of conduct prohibited by the WTO would enable the member concerned to exert undue leverage on other members.

It would disrupt the very stability and equilibrium which multilateral dispute resolution...", according to the panel.

US argued that it can withdraw the generalised system of preferences (GSP) benefits given to India because these are given unilaterally and hence it holds the right to withdraw them too.

"As per WTO laws, GSP benefits must be non-discriminatory. In case the US withdraws GSP benefits it was extending to India, India may consider raising this issue at the WTO," said Biswajit Dhar of RIS, a think tank.

He added that India should not consider signing bilateral agreements with the US.

"If the lawmakers in the US are driven solely by their domestic lobbies, there is hardly any guarantee that they would not renege from the commitments they make in a bilateral agreement," Dhar said.

Source : economictimes.indiatimes.com