Earlier this year, Swaraj had written a detailed post about the US and Switzerland were threatening India’s pharmaceutical policy, including Section 3(d) with a controversial norm known as NVC. NVC stands for Non-Violation Complaint and the provision would allow a WTO member to bring complaints to the WTO even if the TRIPS agreement was not violated. As Swaraj had stated, “A “non-violation” complaint is one wherein a WTO member alleges that despite no actual violation of an Agreement, there has been nullification or impairment of benefits reasonably expected to flow from that Agreement to the complainant, and thus they bring the matter to the WTO dispute settlement mechanism. While this is allowed in two of the WTO Agreements (GATT and GATS), there has been a moratorium on the application of this provision to the TRIPS Agreement.”
There is now news coming out that US and Switzerland has backed out of this threat and have agreed not to introduce this norm for the next two years until end-2017. This decision has been characterized as a compromise between these two nations and emerging economies including India. This decision gains importance as the moratorium on the application of the NVC to TRIPS was ending next month at a meeting of trade ministers at Nairobi.
However, at this time, it is interesting to reflect on Swaraj’s argument that the NVC could be used by India against the US. One wonders whether such a line of thinking had anything to do with this compromise!