By Doug Palmer
WASHINGTON, March 13 U.S. industry groups on
Wednesday called for the United States to increase pressure on
India to reform high-tech, agricultural and pharmaceutical
policies they said block U.S. exports and damage patent rights.
"India has essentially created a protectionist regime that
harms U.S. job creators" in favor of the country's generic drug
manufacturers, Roy Waldron, chief intellectual property counsel
for Pfizer, said in testimony to the House of
Representative Ways and Means trade subcommittee.
Waldron complained that last year India revoked Pfizer's
patent for a cancer medicine, Sutent, "to allow Indian generic
companies to manufacture and sell generic copies."
India also abuses compulsory licenses, which governments are
supposed to use in limited circumstances to suspend drug
patents, for the benefit of its domestic firms, he said.
Waldron urged U.S. government officials to vigorously pursue
those concerns in direct talks with India and to "review all
available policy tools" to pressure the world's largest
democracy to better protect U.S. intellectual property.
The hearing comes as U.S. trade benefits for India are up
for renewal under the Generalized System of Preferences program,
which waives duties on thousands of goods from developing
countries to help them create jobs.
"I want to ensure that U.S. job creators can compete there
on a level playing field," said Representative Devin Nunes of
California, the Republican chairman of the Ways and Means trade
subcommittee, noting India's market of 1.2 billion people should
offer huge potential for U.S. companies.
India is the largest recipient of benefits under the GSP
program, which expires on July 31. It exported $3.7 billion
worth of goods to the United States under the program in 2011,
or roughly one-tenth of its total exports to the United States.
It does make sense to examine whether India should be
removed from the GSP program given its growth in recent years,
but it might be a mistake to portray that as an effort to punish
the country, said Arvind Subramanian, a senior fellow at the
Peterson Institute for International Economics.
"I would be a little hesitant about using that" since the
move is probably not strong enough to change India's behavior,
but would be seen in New Delhi as trade retaliation and damage
the United States diplomatically, Subramanian said.
A better but more time-consuming option would be challenging
more of India's policies at the World Trade Organization in the
hope of winning rulings that would increase pressure on the
government to reform, he said.
Last month, the U.S. Trade Representative's office filed a
WTO case against elements of India's national solar energy
program that it said discriminated against foreign producers in
violation of a global trade rule.
It has also challenged India's restrictions on U.S. poultry
in a case that is to be decided by the end of this year.
Meanwhile, U.S. technology companies are frustrated by
Indian government procurement policies that favor Indian
electronics products over foreign, Dean Garfield, president of
the Information Technology Industry Council, told the panel.
"The PMA (preferential market access) policy certainly does
not bode well for our industry, threatening to shut us out of a
significant portion of the Indian ICT (Information and
communications technology) market," Garfield said.
U.S. companies are also disappointed that India is sitting
on the sidelines in talks in Geneva aimed at expanding the 1996
Information Technology Agreement, which eliminated duties on
scores of high-tech goods, he said.
India also has steep agricultural tariffs and regulatory
barriers that keep out many U.S. farm exports, said Allen
Johnson, a former U.S. chief agricultural trade negotiator.
Last year, India's agricultural exports to the United States
topped $5 billion, a ten-fold increase since 1995, Johnson said.
In comparison, U.S. farm exports to India last year were only
$900 million, well below their potential, he said.
India's reluctance to reduce its farm tariffs has frustrated
the United States in the long-stalled Doha round of world trade
talks, Johnson said.