An interim agreement between EU and India, says no more drug seizures

Category: WTO Sub-category: Trade Agreements
Document type: news

09-August-2011 | 11:10 IST | Edited by: Suman Chatterjee

Indian generic medicinesIndia and European Union (EU) has finally reached an interim agreement on the long-running dispute over India's pharmaceutical generic drugs on their transit, being seized and confiscated at the European ports on unwarranted suspicion of intellectual property rights infringement.

According to Rajiv Kher, additional secretary in the Indian commerce ministry said that the EU is expected to modify the relevant clause in the legislation and notify the same to the member states governments, suggesting the proper manner of handling border enforcement.

The case was appealed to World Trade Organization (WTO) by India and Brazil, initiating consultations on dispute settlement, in the middle of 2010, on the specific issue of capture and detention of generic Indian drugs while on their way to Africa and South America. Total of seventeen Indian drug shipments were impounded at the European ports on the charge of intellectual property rights (IPR) violation. Some of the consignments were damaged or rejected instead of being allowed a free transit to the ultimate destination. The first seizure was in the Netherlands port regarding a blood pressure drug on the basis of European Commission regulation no. 1383/2003 in the end of 2008.

The basis of India's petition is that this sort of action definitely goes against the core values as defined in the General Agreement on Traffic and Trade (GATT), which maintains free international transit through the most convenient route across territories of the contracting parties. Moreover, even according to the obligations enlisted by the EU and the member countries, these sorts of unjustifiable actions impedes the growth of legitimate international trade.

In the two rounds discussion between the EU, India and Brazil held in July and September 2010, EU showed cooperation and willingness to solve the disagreement by acknowledging the fact that some of the legislative clauses were misinterpreted and wrongly executed by the state officials regarding the consignment of the Indian drugs. In turn, India has proposed not to take the matter further to the WTO dispute settlement panel. But as Mr. Kher said, "We have agreed to an interim settlement with the EU. We will wait for the final settlement," he added. "We have not lost our right to agitate the matter again."

It must be remembered this is still an 'interim' agreement. EU may pass more clauses in the future accordingly. As Leena Menghaney, civil health advocate and India campaign coordinator for non-profit organization, Medecins Sans Frontieres, fears that this might be a move on the part of EU since business was going down due to the disruption of the drug shipments. After all, India and EU are active trading partners, and that explains a lot about EU's actions.

External Links

World Trade Organization (WTO) - Official website

GATT - Read more about it.

European Union - Official website

Medecins Sans Frontieres - Official website