ISLAMABAD, May 29: The United States has placed Pakistan on a ‘priority watch-list’, which is likely to lead to economic sanctions and send a bad signal at a time when the country faces serious political and economic problems.

The action has been taken under ‘special 301 legislation’, which is used to put pressure on governments to consider the interests of multinational companies while making legislations.

Official sources told Dawn that the provision could be invoked against a country only when there was a perceived harm to interests of multinational companies due to non-existence of data protection of pharmaceutical companies.

The sources said that the decision had been taken in the wake of a petition filed by the Pharmaceutical Research and Manufacturers of America (PhRMA) with the office of the United States Trade Representative (USTR), stating that Pakistan had failed in 2006 to ensure protection for a certain pharmaceutical test and other data as required under Article 39.3 of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS).

On the basis of this and a few other alleged violations of the TRIPS agreement, PhRMA recommended that Pakistan be placed on the priority watchlist in 2007. However, the sources said the decision was delayed due to some measures taken by the government and Pakistan’s leading role in the war on terror and Washington’s willingness to extend support to the military-led government.