Clause in draft India-EFTA pact may hit drug industry

Clause in draft India-EFTA pact may hit drug industry

Subject: Economy

Section: External Sector

Context:

• A clause in a draft free trade agreement text being negotiated between India and the European Free Trade Association (EFTA) could delay access to affordable, generic versions of patented drugs in India by a minimum of six years.

About Trade and Economic Partnership Agreement (TEPA)

• TEPA aims to boost trade and investment between India and EFTA.
• Goals include tariff reduction, fair market access, and improved IP rights protection.
• Founded in 2018.

European Free Trade Association (EFTA)

• The European Free Trade Association (EFTA) is a regional trade organization and free trade area consisting of four European states: Iceland, Liechtenstein, Norway and Switzerland.
• The organization operates in parallel with the European Union (EU), and all four member states participate in the European Single Market and are part of the Schengen Area.
• They are not, however, party to the European Union Customs Union.
• EFTA was established on 3 May 1960 to serve as an alternative trade bloc for those European states that were unable or unwilling to join the then European Economic Community (EEC), the main predecessor of the EU.
• The Stockholm Convention (1960), to establish the EFTA, was signed on 4 January 1960 in the Swedish capital by seven countries (known as the “outer seven”: Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdom).
• A revised Convention, the Vaduz Convention, was signed on 21 June 2001 and entered into force on 1 June 2002.
• Whilst the EFTA is not a customs union and member states have full rights to enter into bilateral third-country trade arrangements, it does have a coordinated trade policy.
• As a result, its member states have jointly concluded free trade agreements with the EU and several other countries.
• To participate in the EU’s single market, Iceland, Liechtenstein, and Norway are parties to the Agreement on a European Economic Area (EEA), with compliances regulated by the EFTA Surveillance Authority and the EFTA Court.