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Posts Tagged ‘Michael Froman

Washington shakes an IPR fist at India

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As we had expected in 2013 December, the mutual back-slapping over the WTO ‘deal’ between Indian and the USA evaporated very quickly indeed in the face of American business aggressiveness. For the US industry, business and trade associations and lobbies, ‘partner’ means vassal, ‘deal’ means binding obligation, ‘priority’ and ‘sanction’ become weapons (which hurt the poor and vulnerable the most), and ‘trade’ itself means subservience.

And this is why this week, the last of 2014 February, the National Association of Manufacturers in the USA – which represents some 50 American business groups – asked the US Trade Representative to designate India a Priority Foreign Country in its 2014 report. “This designation appropriately would rank India among the very worst violators of intellectual property rights and establish a process leading to concrete solutions,” NAM said in a letter to US Trade Representative Michael Froman.

In its official foreign policy and business pronouncements on India, the government of the USA, its representatives and its agents adopt a tone reminiscent of the 1950s, when American foreign policy and its agricultural scientists joined forces to bulldoze a green revolution in India. Here and now too, the USA likes to hear itself make statements such as “the promise of the 21st Century depends squarely on a robust US-India commercial and strategic partnership” and “central to this partnership will be the co-development and sharing of our best technologies, as well as free-movement between our economies of our best minds and thinkers”.

But the US doesn’t do diplomacy. America’s manner and approach has always been, my way … or else. And that is why one of the most powerful factors influencing Indo-American business and trade connections, the US India Business Council, through its seniormost officer (Ron Somers, who had worked for the energy company Cogentrix in Karnataka), called “attention to India’s need to calibrate regulations to protect data, or inspire India’s future legislature to adjust its Patent Act to align more wholly with international norms particularly regarding incremental innovation”. The USIBC also bluntly said: “Everyone agrees that India needs to spend more on its healthcare system” and that “evolving ecosystems that reward and protect Intellectual Property will be crucial”.

These disagreements between India and the USA have surfaced anew because the USTR is holding public hearings for its annual report, scheduled to be issued in April. This report will be on countries that the US government thinks are “denying protection of IP rights or fair market access to US firms”. The USTR has said that “India is widely perceived in Washington as a serial trade offender, with US firms unhappy about imports of everything from shrimp to steel pipes they say threaten jobs, as well as a lack of fair access to the Indian market for its goods”.

This is among the most signal, and deliberate, failures of the two UPA terms of government – that its reckless and dangerous chasing of foreign direct investment and its reckless and dangerous opening of domains previously in the public sector to private interests have left Bharat and India in such a crippled state that we as a country tolerate such an insult. There is not the slightest hint of fairness in America’s bullying ways, for it wants nothing less than the capitulation of India’s pharmaceuticals industry, and it wants the handing over of insurance – from life insurance to automotive to weather – to its own freebooting companies whose practices have assisted the plunge of a sixth of America’s population into poverty over the last decade.

What may happen now? There are press reports that India may take the USA to face the WTO’s dispute settlement mechanism if included by the USTR in the ‘Priority Foreign Country’ list for intellectual property rights. American industry and trade lobbies are putting pressure on their government to include India under this list. Thus far, the position held within the central government is that the demand (from the US companies) is “completely wrong” as India’s intellectual property rights are compliant with global laws, including that of the World Trade Organisation (WTO).

It is concerning pharma that the American MNCs are most vociferous. US pharma companies had objected to India’s move to issue a compulsory license in 2012 to Hyderabad-based Natco Pharma to manufacture and sell cancer-treatment drug ‘Nexavar’ at a price over 30 times lower than charged by patent-holder Bayer Corporation.

A delegation from the US International Trade Commission (USITC), described as a quasi-judicial agency, has arrived intending to probe the impact India’s policies on trade and investment have on the American economy (the intention is to supply the USTR with ammunition and to prepare for a WTO dispute confrontation; the Americans involved perhaps cannot see or appreciate the irony of the USIBC also praising India for investing in the USA and creating jobs there).

The USITC has raised the Natco matter, and has also raised the rejection of patent to Bristol-Myers Squibb’s Sprycel and Novartis’ Gleevec. It has stated that Indian IPR laws are not Trade Related Aspects of Intellectual Property Rights (TRIPS) compliant under the WTO. The response of the government of India has been to ask all its officials to stay away from any interaction with the USITC delegation.

But we have stood firm till here. Swiss pharmaceuticals manufacturer Novartis AG had lost a legal battle for getting its blood cancer drug Gleevec patented in India and to restrain Indian companies from manufacturing generic drugs. The Supreme Court had rejected the multinational company’s plea last year in a judgement that was loudly and widely hailed in all countries of the South. This came as a blow to the US-EU pharma MNCs who see the very much larger populations of the South as new markets. Hence the threatening fist-waving by the US government.

The complaint by American companies that India refuses to implement laws to provide data protection and to provide patents for bio-pharmaceutical companies is framed in terms of being against the interest of Americans in terms of jobs and ‘fair’ competition in the global marketplace. To support such nonsense, the US Chamber of Commerce’s Global IP Centers issues what it calls an International Intellectual Property Index, which compares the IP laws and implementation of those laws of 25 countries. In the 2014 Index, India received the lowest overall score, with a score of 0 for ‘Membership and Ratification of International Treaties’ and 0.25 for ‘Trade Secrets and Market Access’.

India’s policy on generic drugs has so far refused to accept ‘evergreening’, a scheme used by pharmaceutical companies to continue having a patent over a drug – even after its patent has expired – by modifying it slightly. India’s decision to grant compulsory licenses (within Indian and WTO rules) to anti-cancer drugs by Novartis and Bayer has infuriated Big Pharma in the US. To retaliate, the USA banned Ranbaxy selling medicines from its fourth plant in the USA – so much for being ‘fair’ at home in America; why does Ranbaxy continue to want to do business there?

India’s generic drug policy is guided by the need to provide cheap medicines to a large population that cannot afford even a fraction of the international patent-protected prices of these medicines, as several authoritative civil society responses to the matter have competently pointed out. This is the practice the judiciary has supported and this is the practice that must not change under any circumstance and regardless of the threats and blandishments by Froman and his shylockian collaborators.


Why Bharat must tell the WTO to go to hell

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Update: So far, India’s Minister for Commerce and Industry has said what our farmers’ need him to say at the WTO ministerial meeting.

Activists protest against the World Trade Organisation (WTO) conference in Bali, Indonesia, on 2013 December 04. Image: AFP

Activists protest against the World Trade Organisation (WTO) conference in Bali, Indonesia, on 2013 December 04. Image: AFP

This is good news for our millions of cultivator households, and is also good news for cultivating families and communities in the countries of the South. This bloc must oppose without reservation and compromise of any kind the USA- and EU-led puppeteering of the WTO rules of agriculture to help their food-seed corporations.

The reaction in the corporatised media has been typical, with headlines like ‘Bleak outlook for WTO deal as rifts widen over food subsidies’. Reuters has reported that there are “deep divisions with only one day left to the end of talks” but that “India gains supporters for its stance on food subsidies” and also that “a Bali deal could benefit world economy by as much as $1 trillion”. We have no idea where these absurd numbers have appeared from concerning the alleged ‘benefits’ of the WTO, but foreign and Indian media have also reported the spiky warnings from the Trade Representative of the United States of America, Michael Froman.

He is reported to have said: “Let us not sugar-coat reality: leaving Bali this week without an agreement would deal a debilitating blow to the WTO as a forum for multilateral negotiations.” Froman and his government don’t (or won’t) understand that such an outcome is exactly what we want – no more WTO, for good and forever. He is also reported to have that if the WTO is finished “the unfortunate truth is that the loss will be felt most heavily by those members who can least afford it”. Froman is lying, for it is with WTO that farmers and cultivators in their millions have suffered grievously for a generation.

The Hindu reported that developing nations including India want a ‘peace clause’ (see a few paragraphs below for why we should have no such ‘peace clause’) “till a permanent solution is found on the matter for smooth implementation of the food security programme”. The Hindu report has quoted Sharma as having said that India was not isolated on the food security matter in WTO and majority of countries where over 75% people live are supporting New Delhi’s stand. “I would like to make this absolutely clear that we have not come here as petitioners to beg for a peace clause,” he was quoted as having said.

The section of foreign media that has long spoken for the USA-EU axis of agreement on WTO and its perverse agriculture rules has complained about what it calls India’s opposition. One such newspaper is the Wall Street Journal, which has reported that India “is angry over WTO rules that don’t allow it to move ahead with a massive food subsidy programme”, that negotiators have been trying to win over India by “allowing it to break those rules for four years before reducing the scope of its subsidies”. It needs to be said here (see more below) that an outside agency’s ‘rules’ are immaterial to what Bharat’s people need, and that there is no question of any agency, country, group of countries or foreign entity of any sort ‘allowing’ India to decide the manner of its service to its people.

WTO-bullock-cartEarlier: Our kisans and our farmers have no use for a WTO ‘peace clause’. Our households and families that squeeze their weekly budgets to buy their food staples have no place in their lives for definitions of ‘market distorting subsidies’. Our retailers and wholesalers and fair price shops which supply these households and pay our kisans for the food they grow are much too busy to bother with what ‘amber box’ and ‘green box’ mean, or with the Ninth Ministerial Conference of the WTO.

The question is one not of food sovereignty or the right to food alone, it is also one of our country’s sovereignty and of democratic principles to be respected. For the so-called ‘developed’ countries who are also WTO members, the government of India paying farmers a minimum support price to buy crops that can be stocked (as needed) or released into the Public Distribution System is a ‘market distortion’ and they have invoked all sorts of WTO regulations to show why it is. This is dangerous and must be firmly and finally treated as a threat to the integrity of the Republic of India and its citizens. Whether those who have been sent to the WTO Ministerial Conference (in Indonesia, 2013 December 03-06) to argue India’s case will do so in a manner that protects our kisans and our households is yet to be seen.

Food security, prices that balance the income of farmers and the needs of food-purchasing households, and the quantities involved are matters that lie between the people of Bharat and the government (central and state) that exists to serve us. It is not the business in any way, in any year and under any pretext, of any of the other 192 member countries of the United Nations or of any grouping from amongst them. It is not the business of any UN agency nor any multilateral and/or inter-governmental body or agency regardless of whether India is a member or signatory to any such group or entity. That is the meaning of the sovereignty that exists as the contract between citizens and the state, and that means between us and the government of the Republic of India.

What business does the WTO imagine it has in this matter? Consider its chief operating statement: “The World Trade Organization deals with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.” Arrogant and entirely mercantile, the WTO is incompetent in the matter just described – food security in Bharat. Via Campesina, the worldwide small farmers’ and peasants’ movement, has said: “”After several collapses and stalemates in the negotiations, the WTO has found a way to revive not only itself but also to deepen the free trade liberalisation agenda and expand into areas not previously covered by trade.”

An agricultural road ahead minus a WTO is what India must strive for now.

An agricultural road ahead minus a WTO is what India must strive for now.

Are India’s named representatives at the Ninth Ministerial of the WTO saying so clearly and loudly so that the entire UN system and the WTO can hear? Here is an extract from the statement made by the Union Minister of Commerce and Industry, Anand Sharma, on 2013 December 02: “We cannot continue to have rhetoric of development agenda without even a reasonable attempt to address the issues which are of primary concern to developing economies. For decades, handful of farm lobbies of some countries have shaped the discourse and determined the destiny of millions of subsistence farmers of the developing countries. The massive subsidisation of the farm sector in the developed countries is not even a subject matter of discussion, leave aside serious negotiations.” This position may be useful, but we have to wait and see how it is developed between now and the end of this Ninth Ministerial.

That it may not be developed is already hinted at, for the same minister has also said: “It is therefore difficult for us to accept an interim solution as it has been currently designed. As a responsible nation, we are committed to a constructive engagement for finding a lasting solution. But till such time that we reach there, an interim solution which protects us from all forms of challenge must remain intact.” The ‘interim solution’ is what has popularly been called a ‘peace clause’, by which is mean that the use of measures to procure foodgrains by developing countries to promote food security would continue to be deemed illegal but WTO members would not go into the process of dispute settlement for a certain period.

Moreover, this ‘interim solution’ will be effective for only four years (that is, less than a single of our Plan periods) and Sharma’s saying that “we are committed to a constructive engagement for finding a lasting solution” is no indicator that our representatives to the WTO will tell the WTO that our farmers, our crops and food and our prices is none of its business. As the Institute for Agriculture and Trade Policy has mentioned, a country might seek to use both purchases and sales of stocks to support a level of equilibrium in market prices that supports long-term development objectives.

The bloc of so-called ‘developed’ countries – the USA and some of its habitual crony countries, and the European Union, all of them having subsidised their agriculture heavily and steadily for 50 years – are holding up WTO ‘rules’ to say that if the price paid by our government is higher than the ‘external reference price’, the difference is considered a ‘trade-distorting subsidy’. And what is this reference price? The average international price of 1986-88! As anyone who has even a passing interest in food knows, true food inflation (which households experience) in most of the world has for the last six years been 10% and above. Fuel price inflation has been as much if not more. Fertiliser price inflation: ditto. It is the USA and (some) countries of the EU that have annually supported the cost of cultivation and held retail food prices low to the extent of half their agricultural GDP – which they today say is permitted under WTO rules, but that India’s crop procurement prices is a ‘market distorting subsidy’ that gets in the way of a ‘free market price’!

The concept of a ‘free market price’ is a mythical entity, Prabhat Patnaik has pointed out. “There are so many things that go into the price formation of any commodity, that to single out only a few of them as constituting ‘distortions’ and the rest as ‘non-distorting’ is totally arbitrary,” he has said. “This distinction which has been foisted upon the WTO by the advanced capitalist countries to serve their own interests, and imposed through it upon the entire world, is invidious for several reasons.”

End_WTO_BaliBut the WTO Director-General, Roberto Azevêdo, is considered to have as his priority the success of this Ninth Ministerial Conference in Indonesia (he warned WTO members in his inaugural speech this year that the “world will not wait for the WTO indefinitely” – what he thinks such a waiting world is was not clear, but our kisans want no WTO in their lives). [The International Centre for Trade and Sustainable Development has more.]

Several farmers’ organisations, trade unions and peoples’ campaigns in India have resolved to support the Indian government’s position to not trade away national food security. The group welcomed the decision of the Indian Cabinet on 2013 November 28 November to reject any “peace clause” that does not guarantee a permanent solution. The peace clause has been widely opposed by the Chairs of the Parliamentary Standing Committee on Commerce and Agriculture, the Left parties, and mass organisations, which include Bhartiya Kisan Union, Bharatiya Krishak Samaj, Bharatiya Majdoor Sangh, Focus on the Global South India, Right to Food Campaign, Shram Seva Nyas, South Indian Coordination Committee of Farmers’ Movements, Swadeshi Jagran Manch and Third World Network India.

Nonetheless, the danger we in Bharat have to guard against is both outside and inside. This year, India is an active and vocal member of the group of 33 countries (G-33) whose position is that the present WTO rules which constrain the ability of developing countries’ governments to purchase food from small farmers and stock them must be clarified or changed. But India is also a BRIC country whose ministers are doing all they can to allow foreign ownership of everything from banking to airports to defence to food. Hence this stance is hypocritical (as is India’s stance at the useless and totally compromised climate change COP meetings). Thus, the danger outside is how the USA (plus crony countries) and the EU employ Indian ministers to push through the WTO rules. The danger inside is that Parliament and state legislatures – which technically represent directly affected parties – are being by-passed while the interests of the corporate-financial elite (global, regional, national) are being protected.

It is this danger that has been referenced in the representation by 15 of the major farmer unions of India, including the Bhartiya Kisan Union (BKU) and the Karnataka Rajya Ryota Sangha (KRRS). The representation to Indian Prime Minister Manmohan Singh said: “Forth-seven years after the green revolution was launched, India is being directed at the World Trade Organisation (WTO) to dismantle its food procurement system built so assiduously over the past four decades. This ill-advised move is aimed not only at destroying the country’s hard-earned food security but also the livelihood security of over 600 million farmers, 80% of them being small and marginal.”

And that is why it is time for us to give our government the ultimatum – the world is not about trade but about people and the planet. Ours is not an agriculture in the service of the WTO’s murderous rules and our kisans will not abide being beggared. The crops grown to feed our households rural and urban and the prices set in the mandis and found in the kirana shops are a matter for Bharat. That is why it is time for us to face down the sly brokers in the WTO – and their masters – once and for all.