Pacquiao vs. Hatton? Try India vs. EU at WTO

Fight fans are undoubtedly excited about this weekend's matchup between what many regard as the reigning pound-for-pound boxing champion, the Philippines' Manny Pacquiao, and hard-hitting Mancunian (British-speak for someone from Manchester) Ricky Hatton at the MGM Las Vegas. It's something of a departure as what may be this year's biggest match so far is in the junior welterweight category. Traditionally, fights in the middleweight and above classes have attracted more attention, but it seems today's boxers in those categories are not really big draws at the gate.



If you read this blog on a regular basis, you can probably count yourself as a more rarefied kind of spectator: a trade fight fan; an aficionado of mano a mano combat among inebriated Bush family members nations vying for economic supremacy in the punishing gladiatorial arena of global market share. (I have not gone realist on you all of a sudden; it just looked cool to write given some poetic license.) Anyway, I have previously written about how the bad blood emerged in this trade conflict. For a more extensive backgrounder, do refer to it.



For a shorter version, Indian generic pharmaceutical products have recently been seized at EU ports en route to other LDCs like Brazil as if they were, plainly speaking, contraband. LDCs like India maintain that they are permitted to trade generics among themselves as developing countries can under WTO stipulations--particularly those dealing with TRIPS (trade-related aspects of intellectual property rights). That is, their patent protection regimes for pharmaceutical products need not meet Western standards until 2016. Especially at a time of economic crisis, now is not the time for rich countries to become so unforgiving or so they say. From the earlier post, for instance, Western countries are accused of "forum shopping" or attempting to air their side of the pharmaceutical issue at different international organizations in search for a result more favorable to their interests. Meanwhile, EU authorities maintain that generics shipments may leak into EU markets and hence violate IP law.



The latest news is that India will take the EU to the WTO over these seizures. From the trade publication Pharmabiz:

India will soon take up the issue of seizure of drug consignments from the country en route to Brazil and Africa by European authorities, especially the Dutch officials, on the grounds of alleged patent violation recently to the dispute settlement body of the World Trade Organisation (WTO).



"We have requested the European authorities to reconsider the decision. They have already released two consignments, but after holding them for months. It is useless to get the drugs back after 90 days. We are waiting for the formal reply from EU on our request and meanwhile preparing ourselves to take the matter to the WTO dispute settlement body," commerce secretary G K Pillai told Pharmabiz.



Though the matter was raised strongly in the international fora and directly with the concerned authorities including Netherlands, India is almost ready to move the case with WTO dispute settlement body as a favourable reply from them is unlikely, sources said. The case will be pushed within a few weeks time as the EU still sticking to its stand.



India is also reportedly not very keen on the offer of the WTO director general [Pascal Lamy] to mediate in the matter between the two sides, it is learnt.



India is of the view that EU has breached the provisions of trade-related aspects of intellectual property rights and General Agreement on Tariffs and Trade that covers international trade in goods. No consideration was given that these seized consignments were destined to other countries where there were no patent protections for these drugs. "There was not an iota of evidence that any of these products were likely to be diverted to the European markets, a must as per the TRIPS Agreement for such an action," Pillai said.



"The international legislation on the subject as incorporated in the GATT and TRIPS very clearly brings out the freedom of transit for products and the range of border measures which can be taken in such cases. Even where countries can adopt measures more ambitious than this legislation, the enforcement of such measures has to be adequately influenced by the available evidence. We have brought out the illegality and inconsistencies in the European action," he said.



There were around six reported incidents of seizures of Indian drug consignments at the EU ports. These include HIV/AIDS medicines meant for Nigeria. It was being imported by Clinton Foundation. Clopidogrel bilsulphate (API) from Ind-Swift Laboratories, olanzpine tabs from Cipla, rivastigmine tab from Cipla and losartan from Dr Reddy's Labs were also among the seized consignments in the recent past.

I still think this is a PR disaster for pharmaceutical firms and their Western host countries. Seize HIV/AIDS drugs headed for Africa being imported by the Clinton Foundation? Some things are better left swept under the rug. Unlike the South Korea vs. India matter, I believe the latter has a better case here in addition to having the ear of world public opinion. Who's the favorite and who's the underdog? Trade fights are usually more intriguing in that there are several intriguing subplots: North vs. South, LDCs stated needs for affordable medicines vs. drugmakers' stated needs for returns on drug development, etc.