India-European Free Trade Association Agreement (India-EFTA) And Intellectual Property Rights (IPR)

February 17, 2024

Context:

This editorial is based on the news “Brave new world: On the India-European Free Trade Association agreement and IPR” which was published in the Hindu. There are high expectations that a free trade agreement (FTA) involving India and the European Free Trade Association (EFTA) is close to fruition.

Relevancy for Prelims: India-European Free Trade Association (EFTA), World Intellectual Property Organisation (WIPO), India’s Evolving Global Trade Relations, and World Trade Organization (WTO).

Relevancy for Mains: The Trade Policy of India with EFTA, Issues of the pharmaceutical sector in India.

Schengen area: It is an area comprising countries in Europe that have mutually abolished all passport requirements and other border control mechanisms among themselves.

The agreement was signed in Schengen, Luxembourg, in 1985.
As on 13 February 2024, the Schengen area encompasses most European Union (EU) countries, except for Cyprus and Ireland.

About European Free Trade Association (EFTA)

Established on: May 3, 1960
Aim: It was set up for the promotion of free trade and economic integration to the benefit of its member states and the benefit of their trading partners around the globe.
Members: Consists of four European countries – Iceland, Liechtenstein, Norway, and Switzerland.
Headquarters: Geneva, Switzerland.
Features: The EFTA countries are all part of the Schengen area. All member states of EFTA are members of the WTO.

European Free Trade Association (EFTA): Historical Background

Negotiations on a broad-based Trade and Investment Agreement between India and the EFTA States were officially launched in January 2008.
The Intellectual property rights (IPR) has been a persisted issue since 2008.
Data exclusivity, a principle seen in Europe and many developing countries, could impact India’s drug industry, a major exporter of affordable drugs.
India, as the largest supplier of generic medicines, has opposed including data exclusivity in Free Trade Agreement (FTA) negotiations, despite recent leaked drafts indicating its presence in discussions.

Pharmaceutical Industry Dynamics

In the pharmaceutical industry, drug discovery is costly, but manufacturing of generic drugs is cheap. This leads to a tussle between the original drug manufacturers and generic manufacturers.
Incentives for Developing New Drugs:
- Patents: They are designed to encourage innovation by granting monopoly power to patent holders for a period of time, typically 20 years from the application filing date.
- Data Exclusivity: It is a form of market exclusivity outside that provided by patent rights.
Compulsory Licensing, as a safeguard to public health: It is when a government allows someone else to produce a patented product or process without the consent of the patent owner or plans to use the patent-protected invention itself.
- It is a tool governments can use to prioritise public welfare over exclusive patent rights in situations of urgency, ensuring access to essential goods and services.

Issue in Free Trade Agreement (FTA) Negotiations

Intellectual property rights (IPR): The European Free Trade Association (EFTA) states especially Switzerland and Norway are specialised in pharmaceutical products.
- The EFTA states are apprehensive that the free trade agreements with India could affect their competitive advantage and the profitability of the pharmaceutical companies located in the EFTA states.
Data Exclusivity: makes the clinical trial data about a drug exclusive for at least six years.
- During this time, generic versions cannot use this data for approval unless the regulator can rely on it.
- The Generic makers often depend on the original company’s published data for this purpose.

Way forward

Creating Ecosystem for Innovation: India has risen up the drug manufacturing chain in the last few decades. To sustain this growth, it needs to invest in an ecosystem for ethical drug trials and creating new medicines.
- India’s innovative approaches to vaccine development during the COVID-19 pandemic has proven that drug discovery need not be confined to the West.
Balancing Innovation, affordability, and intellectual property protection.

Also Read: India And World Trade Organisation (WTO)

Prelims PYQ (2016):

In the context of which of the following do you sometimes find the terms ‘amber box, blue box and green box’ in the news?

(a) WTO affairs

(b) SAARC affairs

(d) India-EU negotiations on FT

Ans: (a)

Mains Question: What are the direct and indirect subsidies provided to farm sector in India? Discuss the issues raised by the World Trade Organization (WTO) in relation to agricultural subsidies. (250 words, 15 Marks)

Must Read
NCERT Notes For UPSC	UPSC Daily Current Affairs
UPSC Blogs	UPSC Daily Editorials
Daily Current Affairs Quiz	Daily Main Answer Writing
UPSC Mains Previous Year Papers	UPSC Test Series 2024