Thursday, May 12, 2011

India May Loose The Generalised System Of Preferences (GSP) Scheme Of EU

European Union and India are in the process of considering the latest Free Trade Agreement (FTA). However, disagreements have already started surfacing. For instance, the intellectual property rights (IPRs) issues have already been subject to hot debate.

Further, EU, India and other countries may also face Technological Issues of IPRs in future, says Praveen Dalal, managing partner of New Delhi base IP and ICT law firm Perry4Law and leading techno legal expert of India. For instance, Technology Transfer has been a subject of much debate in the past. While developed countries are reluctant in technology transfer yet developing countries are insisting for the same, informs Dalal.

Similarly, in the Patent field as well, especially Pharmaceutical related IPRs, tussles between India and other countries are going on. While developed nations are insisting upon TRIPS Plus Provisions in Data Exclusivity regime, India is in no mood to do the same, informs Dalal.

Now EU has aimed another blow upon developing countries. EU’s Trade Commissioner, Karel De Gucht, has announced plans to slash the number of countries, from 176 to 80, that benefit from the generalised system of preferences (GSP) scheme, whereby eligible nations enjoy reduced or zero customs tariffs on imported goods.

The proposed reforms would come into practice from 2014. Speaking to reporters, De Gucht made it clear the action was aimed at large emerging economies like India, Brazil and Russia, which did not require continued specialized assistance, given their newly muscular economies. He said 40 per cent of the EU’s “current preferences benefit Russia, Brazil, China, India and Thailand, which no longer need the same.” Further, countries classified by the World Bank as high-income or upper-middle income countries for three consecutive years would automatically become ineligible.

If dropped, India may be forced to enter into FTAs with EU. This is the core strategy of EU where it can force other countries to fall in line with its own International Trade Objectives, suggests Dalal. However, implications of this decision of EU have yet to be analysed from the perspective of TRIPS Agreement, says Dalal.