Donald Trump’s trade war may extend to IPR ‘violators’
Though China is likely to be the main target of any IPR-related sanctions by the US, it may also spell trouble for India
New Delhi: US President Donald Trump may take on countries allegedly violating intellectual property rights (IPR), ahead of the release of the Special 301 report by the US Trade Representative (USTR) next month, opening another front in a trade war that started with the US raising import tariffs on some items.
Trump on Wednesday night tweeted: “The US is acting swiftly on intellectual property theft. We cannot allow this to happen as it has for many years!”
Though China is likely to be the main target of any IPR-related sanctions by the US, it may also spell trouble for India as the USTR has been keeping India on its priority watch list, claiming it to be one of the world’s “most challenging major economies” with respect to protection and enforcement of intellectual property. It has even threatened in the past to downgrade India to a “priority foreign country”, which could invite sanctions.
In its representation before the USTR on a Special 301 hearing, US lobby group Alliance for Fair Trade with India on Thursday urged the US government to again place India in the priority watch list. “There is strong evidence that India has not made sufficient efforts to emerge from its current status under the priority watch list, or to protect adequately IPR holders’ interests with respect to patents, copyright, and trade secrets,” it added.
India has over the years rejected the observations in the Special 301 report, maintaining that it is a unilateral report of the US government and that India is fully compliant with multilateral IP regulations.
The report released last year said IP holders continue to report high levels of piracy and counterfeit sales on the internet, in physical markets and through commercial broadcasts in India.
The US has also been complaining about India issuing compulsory licensing (CL) to a third party to produce a patented medicine without the consent of the patent owner, citing health emergency to bring down high prices charged for such life-saving drugs.
India has only once issued CL in 2012 to Hyderabad-based Natco Pharma Ltd to manufacture and market a copy of Bayer AG’s liver and kidney cancer drug Nexavar. The US has continued to raise the matter at bilateral meetings even after the Supreme Court dismissed a plea by Bayer in 2014.
Trump is expected to make a formal announcement regarding his plan to slap 25% tariff on import of steel and 10% on aluminium late on Thursday. US trade officials have signalled that Trump may exclude key allies like Canada and Mexico from the tariff hike on steel and aluminium, at least till efforts to renegotiate the North American Free Trade Agreement or Nafta are concluded. It is not clear whether Trump will exclude the European Union, which has threatened to take counter-measures on imports from the US if Trump puts sanctions on items from the bloc.
Indian government officials have claimed its steel and aluminium exporters are unlikely to face a major hit as US is not a key market. India is the world’s 14th-largest steel exporter. The US ranked seventh as a destination for India’s steel exports, accounting for just 5% of exports. India has a paltry $23 billion trade surplus with the US and figures at the ninth spot compared to China’s $375 billion trade surplus against the US. But that has not stopped Trump from claiming trade distorting measures by India.
The Trump administration has time and again insisted that India is resorting to discriminatory trade practices, which have led to a large trade deficit for the US. However, India has been insisting that it conducts its trade policy in a non-discriminatory and transparent manner. Last week, Trump criticized India for imposing high import duty on the iconic Harley-Davidson motorcycles and threatened to increase import tariff on “thousands and thousands” of Indian motorcycles to the US.
During a discussion with members of the Congress on the steel industry, Trump said the recent decision of the Indian government to reduce the tariff on Harley-Davidson motorcycles from 75% to 50% was not enough and asked that it should be reciprocal, as the US imposes “zero tax” on the import of Indian motorcycles.
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