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A word of caution on EU's trade agreement

April 15, 2010 12:22 IST

Tough intellectual property rights sought by the EU in its free trade agreement with India have set off global protests.

For long, Europe was viewed as the "nice" guy of the global trading system. To its partners in the Third World countries, the European Union came across as less aggressive and more understanding of developing country problems than the US; it offered preferential treatment to the poorest nations and, overall, it enjoyed a reputation, not always deservedly, for being sympathique. Not in recent decades, though.

The trade agreements that it is driving with developing countries are turning out to be as predatory as those of the US -- harsh pacts that trap poor nations in intellectual property regimes that are much worse than what the World Trade Organisation has mandated under its TRIPS or trade-related IP rights agreement. Europe, it could be said, has bared its fangs by pursuing an IP maximalist agenda that it is embedding in its free trade agreements across the globe.

Look at its FTA with Colombia and Peru which is scheduled to be signed in May. Taking its cue from similar FTA that was rammed through by the US in 2006, the EU is demanding sweeping provisions on pharmaceutical patents apart from other IP rights.

It has managed to wrest test data exclusivity -- this is a stratagem for protecting clinical information necessary for getting marketing approval for medicines and goes beyond the TRIPS agreement -- for a five-year period. The consequence: entry of generic versions of branded drugs will be delayed for much longer than the patent protection period and will push up healthcare costs for these two Andean countries.

According to a study published last year by Health Action International (HAI), a non-profit organisation working for healthcare access, data exclusivity for a decade, would have forced Peruvians to spend an additional $300 million on medicines by 2025.

Incidentally, more than half of Peru's population lives in poverty. The 27-nation bloc is also pushing for tough IP protection clauses to be included in the "association agreement" that is being negotiated between the EU and six Central American nations: Costa Rica, Guatemala, El Salvador, Honduras, Panama and Nicaragua.

One of the measures it is pushing for is a clause requiring customs authorities to impound consignments of goods that "violate IP standards". Although the EU maintains it is intended to curb the trade in counterfeit goods, India knows from experience that the trade bloc is targeting its production of generic drugs by trying to make it appear that these are counterfeits.

EU's trade halo was badly tarnished in 2008 when it began implementing a deeply flawed IP protection regime by seizing consignments of Indian drugs meant for customers in third countries at its ports. It allowed its customs authorities to seize generic medicines from India on the ground that these were "counterfeit drugs". It was clearly a ploy to stop exports of generics from this country which has supplied low-cost medicines to a huge swathe of the developing world which is fighting AIDS epidemics.

The FTA is seen by activists here and abroad as the final attempt to close down the pharmacy of the world. As another round of talks was kicked off this Monday in Brussels, much of the world is taking unusual interest in this controversial FTA. Although the provisions of the FTA are still secret despite a well-publicised "leak" on the Net and commerce ministry officials maintain there is no text as yet. But that has not helped Delhi to dodge the spotlight. Protests by a motley group of activists in Delhi and a high-profile global campaign have kept the pressure on India not to make any IP concessions on health-related issues.

Leading the protest is the international humanitarian aid group Médecins Sans Frontières which points out that the FTA would make it more difficult for the world's poorest patients to access AIDS drugs. Apart from worries on data exclusivity, the big concern is about the reported EU demand to extend the patent term beyond the regulation 20 years to "compensate" pharmaceutical companies for any delay in grant of patent by the Indian authorities.

Such invidious proposals have prompted several members of the European Parliament also to join the extraordinary global campaign against provisions of the FTA that would impact public health policies. But can they stand up to the powerful lobby of BusinessEurope which brings together the 40 leading national business federations? BusinessEurope wants a no-nonsense approach to tough IPR standards that it believes are critical for Europe's competitiveness. Outlining its priorities for the next five years, it exhorts the EU to "address the scourge of counterfeiting and piracy in its bilateral relations with key strategic partners (e.g. China, Russia, India and Brazil) and in the framework of the Anti-Counterfeiting Trade Agreement negotiations" (a secretive pact promoted by the US). It, therefore, wants the EU to "press for the adoption of the highest standards of IPR protection in the domestic legislation of its trading partners". Given this, and the various legal challenges to India's patent law mounted by European pharma giants in the Supreme Court, Delhi clearly needs to watch out.

Latha Jishnu
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