Feb 16, 1998

INDIA WANTS TIME TO COMPLY WITH TRIPS RULING

Geneva, 13 Feb (Chakravarthi Raghavan) -- India advised the WTO's Dispute Settlement Body (DSB) Friday that it intends to comply with the ruling against it on the transition provisions of TRIPs, but that it would need time till 16 June 1999 to comply with the recommendations and rulings of the DSB.  

The DSB recommendation, based on a panel ruling, partially modified by the appellate body, related to India's obligation under Art. 70.8 of TRIPs, to provide for what is popularly called 'mailbox' mechanism to receive applications for pharmaceutical and agro-chemical products patents, and under Art. 70.9 of TRIPs, to provide exclusive marketing rights in respect of patents granted in another WTO member after 1 January 1995 and for marketing approval had been given.

The DSB had adopted the ruling and recommendation at its meeting on 16 January.  

The Indian request for time till 16 June 1996 was rejected by the United States, which had raised the dispute. Mr. Andrew Stohler, for the US, suggested that the Indian President should use his powers under the constitution and issue an ordinance to comply with the ruling! 

In terms of Art. 21 of the DSU, India and US have time till 2 March (45 days from adoption of the ruling) to agree on a period of time for implementation. Failing mutual agreement, it is to be decided by arbitration within 90 days from 16 January. The arbitrator has a suggested guideline of 15 months as reasonable maximum period for implementation.

In a recent dispute with Japan over taxes on imported alcoholic beverages, where the arbitrator gave a 15 month period, Japan subsequently reached an accord with the US and other parties for exceeding this period in implementing a part of the ruling, but after quietly providing compensation to the US through accelerated implementation in other parts.

In a statement to the DSB Friday, Indian ambassador S. Narayanan, argued that the panel ruling on Art. 70.8 related only to how India should carry out this obligation - the panel and the appellate body having reached the conclusion that the 'administrative instructions' India provided to receive such applications was inconsistent with India's obligations. The dispute over Art. 70.9 was only about when India would need to carry out its obligations over exclusive marketing rights. While India had argued that the EMR grant would arise only after the conditions (about grant of patent elsewhere and clearance of marketing rights) had been fulfilled, while the ruling was that a mechanism should be in place on 1 January 1995.

India's perceived failures to carry out the obligations were on "narrow technicalities" and not any deliberate intent or unwillingness to carry out the obligation, the Indian ambassador contended.  

It was India's intention to meet its obligations on this matter, but would need a "reasonable period of time" to comply with the recommendations and rulings.  

In what seemed to be a reference to the current general elections and the formation of a new government (and the post-election Parliamentary agenda and business), Narayanan said that in the light of the current situation and taking all relevant circumstances into consideration, India would require time till at least 16 June to comply with the recommendations.

But the US said that just as initially India had sought to comply with its obligations through an ordinance issued by the President, it should do the same now - presumably ignoring the constitutional requirements about the election process and the convening of Parliament immediately after the voting is completed and returns are in.

In other matters before the DSB, Turkey blocked India's request for a panel to rule on Turkey's restrictions on imports of textiles and clothing products, purportedly in order to comply with the regime of the European Communities with which Turkey has now a customs union.  

The dispute dates back to April 1996.  

The Turkish restrictions had been challenged by India, which said the discriminatory quantitative restrictions violated the GATT and was inconsistent with Art. 2 of the Agreement on Textiles and Clothing. India had sought consultations with Turkey and it was set for 18-19 April 1996. But having agreed to the dates, and after Indian officials had come from the capital for the consultations, Turkey did not enter into the consultations, India advised the DSB Friday. India was therefore entitled to seek a panel directly.  

When India brought the issue before the DSB Friday, Turkey blamed the failure to hold consultations on the problem about the EC's role, and the inability to reach an accord with India over the procedure about the EC's participation, and its status (as a disputant or as an interested third party).  

Turkey argued that the dispute raised 'systemic' issues which were being addressed by the WTO Committee on regional agreements which was looking into the EC-Turkey customs union. By raising the dispute now, India was pre-empting the decisions of the WTO Committee which took decisions by consensus. For these reasons, Turkey said, it could not agree to the reference of the dispute to the panel at this meeting.

The EC supported the Turkish view, and suggested that there was need for everyone to "reflect" on the issue.  

This was an issue of vital importance to the EC, which was directly involved because of the customs union, and the dispute would be examined by a panel without the EC being directly associated with it.

No action was taken. 

The DSB is due to meet next on 13 March. India, could inscribe on the DSB agenda for that meeting the dispute it has now raised with Turkey, and reference to a panel would then be automatic.  

Earlier, the US had advised that it was taking off the agenda, the dispute over Ireland's non-compliance with obligations on copyright and neighbouring rights. No explanation was given. But it was generally understood that Ireland has given assurances that it would take steps to ensure compliance (by suitable changes in law), and the US has "suspended" its complaint till then.  

The DSB also adopted the ruling and recommendations of the WTO panel and its appellate body on the hormone-beef ruling. The EC made a lengthy statement, but did not indicate how it would implement the ruling. It has time till 16 March to advise the DSB on this.

Beyond saying that it was a lengthy statement, a WTO spokesman briefing the media could not say what the EC position on the ruling was, and referred the media to the EC, explaining that the EC would not make available the copy of its statement. 

The US and Canada, the two parties who brought the dispute up in the first place, in their statements welcomed the ruling, stressing their position that any restrictions under the Sanitary and Phytosanitary Agreement had to be based on scientific principles and on the basis of a risk assessment. New Zealand, Australia, Norway and Switzerland also spoke welcoming the ruling and its adoption.