The Indo-EU FTA has been a cause for concern for a long time now, with serious worries expressed by both industry people and political parties in India. Recently, the party CPI(M) lashed out at the government for having proceeded with the FTA without any scrutiny by Parliament or other democratic institutions, despite so many disadvantageous terms in the FTA . Last week, Amul had expressed its worries about the domestic dairy sector taking a huge hit if EU products enter the market under the terms of the FTA. We had blogged about it here: The FTA proposes import subsidies on dairy products, and this combined with EU’s efforts to extend protection of its GIs(Feta, Mozzarella, Emmentaler cheese) to countries outside the EU by requiring the country with which it is negotiating an FTA to protect some or all of its registered GIs will entitle EU products to double protection and hurt domestic interests. This pattern has been observed in the EU-South Korea FTA and EU-Singapore FTA.
According to the party, the FTA is likely to worsen the already burgeoning current account deficit and trade deficit. It said that intellectual property, investment and government procurement chapters of the agreement would have a negative impact on virtually every area of economic activity – including agriculture, industry and services. Amid other fears, higher standards of intellectual property protection will have a negative impact on health services. It has also expressed its dissatisfaction with the non-transparent negotiating process, without any public consultation, parliamentary oversight, or involvement of state governments.
The party has demanded from the government to not conclude the negotiations this month and wait for the report of the Parliamentary Standing Committee on Commerce, to share the negotiating texts and remedy the all the issues through parliamentary debates and public consultations. This seems a tad unlikely, especially when the Minister for Commerce and Industry, Mr. Anand Sharma has repeatedly claimed that the FTA is on the verge of completion( India expects to conclude it by Apr 14-15) . Moreover, EU officials also seem in a hurry to conclude the deal before June, as post June the country will go into the ‘election mode’.
The pharma industry and health activists are especially worried about the terms in the FTA. They suspect that the final agreement may include clauses regarding patent infringement. A draft version of the agreement included a clause in particular stipulating that a mere suspicion of patent infringement by Indian drugmakers could lead to seizure of the company’s bank accounts and immovable property. If these clauses are agreed to, the FTA will go far beyond TRIPS provisions. Shamnad Basheer said here, “Provisions on freezing bank accounts, seizing property in a suspected infringement case or holding intermediate players liable in cases of patent infringement are beyond the mandate of TRIPS.” Further, a possible clause allowing legal proceedings to be initiated against third parties could deter them from working with generic producers and have grave ramifications in the area of public health.
Previously, IP-Watch discussed the pitfalls of the FTA here.
Read the leaked text of the FTA here.