December 2004 News

Pharmaceutical Price Controls in OECD Countries: Implications For U.S. Consumers, Pricing, R&D, and Innovation

On December 21, the Commerce Department released a study which reviewed the drug pricing practices of OECD countries and assessed the impact of such practices on U.S. consumers, pricing, research and development (R&D), and innovation. The study reviewed the drug pricing practices of 11 OECD countries: Australia, Canada, France, Germany, Greece, Japan, South Korea, Mexico, Poland, Switzerland, and the UK. The principal finding of the study (prepared in consultation with the International Trade Commission, Department of Health and Human Services, and USTR), is that price controls used by the OECD countries examined collectively result in reduced R&D that would provide substantial health benefits to all. While the deregulation of OECD prices is not likely to have a direct impact on drug prices in the U.S. in the short term, the increased competition resulting from price deregulation could over time improve health outcomes, and follow-on drugs could increase competition and lower prices. Additionally, the absence of price controls in OECD countries would contribute an additional $5 to 8 billion in R&D funding. Questions should be directed to: drugpricing@ita.doc.gov. The study can be viewed via: http://www.ita.doc.gov/drugpricingstudy.

U.S. Wins WTO Case Against EU Over Food Names

On December 21, U.S. Trade Representative Robert B. Zoellick announced that the U.S. had prevailed in its WTO case against the European Union regarding geographic food names known as "geographical indications." Geographical indications, or "GIs", are geographic names that have a particular association with a product, such as Idaho potatoes or Florida oranges. In its report, the WTO panel agreed with the U.S. that Europe’s regulation discriminates against U.S. products and producers and is therefore contrary to WTO rules. The panel also agreed with the U.S. that Europe could not, consistent with WTO rules, deny U.S. trademark owners their rights. The panel emphasized that any exceptions to trademark rights for the use of registered GIs were narrow, and limited to the actual GI name as registered. Zoellick commented, "This is a big win for American farmers and food processors… We also welcome the panel’s findings that protecting GIs need not and should not harm the rights of trademark owners. These findings are important to the rights of U.S. companies protecting their trademarks in Europe." View USTR press release

Request for Public Comments on Scope of Environmental Review of U.S.-UAE Free Trade Negotiations

USTR, through the Trade Policy Staff Committee (TPSC), is initiating an environmental review of the proposed U.S.-United Arab Emirates Free Trade Agreement. The TPSC is requesting written comments from the public on what should be included in the scope of the environmental review. The TPSC also welcomes public views on appropriate methodologies and sources of data for conducting the review. Persons submitting written comments should provide as much detail as possible on the degree to which the subject matter they propose for inclusion in the review may raise significant environmental issues in the context of the negotiation. DATES: Public comments should be received no later than February 25, 2005. For information on submitting comments, please consult the Federal Register notice

Request for Public Comments on Scope of Environmental Review of U.S.-Oman Free Trade Negotiations

USTR, through the Trade Policy Staff Committee (TPSC), is initiating an environmental review of the proposed U.S.-Oman Free Trade Agreement. The TPSC is requesting written comments from the public on what should be included in the scope of the environmental review. The TPSC also welcomes public views on appropriate methodologies and sources of data for conducting the review. Persons submitting written comments should provide as much detail as possible on the degree to which the subject matter they propose for inclusion in the review may raise significant environmental issues in the context of the negotiation. DATES: Public comments should be received no later than February 25, 2005. For information on submitting comments, please consult the Federal Register notice

Request for Comment: Employment Impact of U.S.-United Arab Emirates FTA Negotiations

In a Federal Register notice, the Trade Policy Staff Committee (TPSC) gives notice that USTR and the Labor Department are initiating a review of the impact of a proposed free trade agreement (FTA) between the U.S. and the United Arab Emirates (UAE) on U.S. employment, including labor markets. This notice seeks written public comment on potentially significant sectoral or regional employment impacts (both positive and negative) in the U.S., as well as other likely labor market impacts of the FTA. DATES: USTR and Labor will accept any comments received during the course of the negotiations of the FTA. However, comments should be received by noon, February 16, 2005, to be assured of timely consideration. For information on submitting comments, please consult the Federal Register notice.

Request for Comment: Employment Impact of U.S.-Oman FTA Negotiations

In a Federal Register notice, the Trade Policy Staff Committee (TPSC) gives notice that USTR and the Labor Department are initiating a review of the impact of a proposed free trade agreement (FTA) between the U.S. and Oman on U.S. employment, including labor markets. This notice seeks written public comment on potentially significant sectoral or regional employment impacts (both positive and negative) in the U.S., as well as other likely labor market impacts of the FTA. DATES: USTR and Labor will accept any comments received during the course of the negotiations of the FTA. However, comments should be received by noon, February 16, 2005, to be assured of timely consideration. For information on submitting comments, please consult the Federal Register notice.

WTO: Vietnam Accession Moves Forward

Vietnam’s membership negotiations progressed further on December 15 as the working party examined the first draft of the report it will issue at the end of the negotiation. Vietnam announced it had completed six bilateral deals (with Argentina, Brazil, Chile, Cuba, the EU and Singapore) and was close to concluding another seven. Members unanimously reaffirmed their support for Vietnam to join the WTO as rapidly as possible. Members also praised Vietnam for its hard work and many of them mentioned the particularly productive bilateral market access negotiations they had held with Viet Nam since the Working Party’s last meeting in June 2004. View WTO news item.

China: 2004 Report to Congress on WTO Compliance

In its 2004 Report to Congress on China’s WTO Compliance, released December 11, USTR detailed the progress China has made in implementing the trade commitments it made three years ago to become a WTO member. While stating that China deserves "due recognition" for the "tremendous efforts" it has made to reform its economy, the report adds: "While China's efforts to fulfill its WTO commitments are impressive, they are far from complete and have not always been satisfactory, and China at times has demonstrated difficulty in adhering to WTO rules." As stated in the report, the U.S. is particularly concerned with issues such as intellectual property rights, trading rights and distribution services, insurance, express delivery, telecommunications services, agriculture, industrial policies and transparency. The report says the U.S. will continue to press China to comply fully with its WTO commitments, with particular emphasis on ensuring effective protection of U.S. patents, trademarks and copyrights in China.

Request for Public Comment: Special 301 Out-of-Cycle Review for China

View the Federal Register notice soliciting public comment regarding the Out -of-Cycle Review for China, which was announced by USTR on May 3. USTR requests that the public submit written comments concerning the acts, policies, and practices relevant for this review under Section 182 of the Trade Act by 5:00 p.m. on January 31, 2005. For more information regarding submission of comments, please consult the Federal Register notice.

U.S.-Panama Trade Talks Moving Forward, Say USTR Officials

Regina Vargo, assistant U.S. trade representative for the Americas, and Allen Johnson, chief U.S. negotiator for agriculture, told reporters that the recently concluded sixth round of U.S.-Panama trade negotiations made important progress toward a bilateral free-trade agreement. Ms. Vargo said there are "very few text issues left" to resolve. She noted that "some selective issues remain" to be dealt with, mostly relating to unique aspects of the Panama Canal, and agriculture. Johnson said that both countries have "sensitivities" in terms of controlling market access for certain types of agricultural products and commodities such as poultry, pork, beef, dairy, corn and rice. Asked about any categories that might be excluded from the trade talks, Johnson said that market access is the goal. Vargo expressed optimism that any lingering differences between the two countries would soon be addressed by their respective negotiators. The next round of U.S.-Panama trade talks will take place in Washington the week of January 10, 2005, Vargo said.

U.S., Egypt and Israel to Launch Historic Trade Partnership

U.S. Trade Representative Robert B. Zoellick will travel to Cairo, Egypt, on December 13-14, 2004, to participate in the signing of an historic trade partnership involving Egypt, Israel, and the U.S. The agreement will create Qualified Industrial Zones (QIZs) in Egypt, allowing for duty-free export to the U.S. of certain Egyptian goods that contain Israeli inputs. "This is the most important economic agreement between Egypt and Israel in two decades," Zoellick said. "It is a concrete, practical result of President Bush’s plan to promote closer U.S. trade ties with the Middle East so as to strengthen development, openness, and peaceful economic links between Israel and its neighbors.” The QIZ program was established by the U.S. in 1996 to encourage economic cooperation, closer ties, and peaceful relations between Israel and its QIZ partners. The establishment of such zones in Egypt builds on other steps recently taken by the U.S. to promote economic freedom in the region.

View USTR press release

Trade Negotiating Power Likely to Be Extended, USTR Says

During December 7 remarks in Paris, U.S. Trade Representative Robert Zoellick predicted that Congress will allow a two-year extension of President Bush's trade negotiating authority (which expires in mid-2005) to go forward, giving more time to conclude WTO negotiations, as well as bilateral and regional negotiations. The law can be extended two years upon the President's request unless either the House of Representatives or Senate votes against extension. Zoellick also mentioned the likelihood of a 2005 vote in Congress on whether the U.S. should remain a member of the WTO, but he offered no prediction on that issue. On the ongoing WTO Doha Development Agenda negotiations, Zoellick said he has been consulting with major participating countries to sustain in 2005 the momentum that has been achieved in 2004. He stated, "I think the goal would be to try to get this done in a 2005-2006 timeframe, but a lot of things have to come together to make that successful."

Request for Comments on WTO Doha Development Agenda and Dispute Settlement Understanding Negotiations

The Trade Policy Staff Committee (TPSC) is requesting written public comments on general U.S. negotiating objectives as well as country-, product-, and service-specific priorities for the multilateral negotiations and work program in the Doha Development Agenda (DDA) negotiations conducted under the auspices of the WTO. The TPSC is seeking to supplement and refine positions in light of progress to date in the negotiations, notably, the Decision Adopted by the WTO General Council on August 1, 2004 on the Doha Work Program. The TPSC is also seeking comments on proposals advanced in the WTO review of the Dispute Settlement Understanding. Public comments are due by January 31, 2005. For additional information (including how to submit comments), please consult the Federal Register notice.

President Signs Law on Laos and Armenia Trade Relations, Miscellaneous Tariffs

President Bush has signed into law a broad trade package that extends normal trade relations to Laos and Armenia, suspends tariffs on hundreds of products not produced domestically, and repeals a 1916 dumping law ruled illegal by the WTO. Armenia has had normal trade relations with the U.S. on an annual renewable basis. Armenia's recent entry into the WTO required Washington to make the status permanent.

View USIS Washington File report

Recognition by Singapore of U.S. Law Schools Under U.S.-Singapore Free Trade Agreement

USTR is seeking public comment in selecting four U.S. law schools whose degrees will be recognized by Singapore for admission to the Singapore bar, as required under the U.S.--Singapore Free Trade Agreement. USTR invites written comments on whether the law schools of Columbia University, Harvard University, New York University and Yale University should be designated as the four whose degrees will be recognized by Singapore. Written comments are due by noon, Monday, January 3, 2005. For information on making submissions, please consult the Federal Register notice.

Brazil Generalized System of Preferences IPR Review Extended

On December 6, the Bush Administration announced that it will continue to review a petition to remove Generalized System of Preferences (GSP) benefits from Brazil for inadequate protection of intellectual property rights. The U.S. has held a series of meetings with Brazil and notes the measures taken to date to address copyright piracy concerns. These discussions have resulted in identification by the Government of Brazil of a number of key priorities and actions to combat copyright piracy through enforcement of existing laws. Accordingly, the U.S. and Brazil expect to maintain a dialogue on developments in this critical area. In the meantime, the review of the petition has been formally extended through March 31, 2005 in order assess Brazil’s progress in meeting these shared goals. The Administration attaches a high priority to obtaining substantial improvement in the protection of U.S. intellectual property rights in Brazil, and will continue to work closely with U.S. copyright interests to that end. View USTR press release

Request for Comments, Notice of Public Hearing on Proposed U.S.-Oman FTA

In a Federal Register notice, the Trade Policy Staff Committee (TPSC) notes that it will convene a public hearing and seek public comment to assist USTR in amplifying and clarifying negotiating objectives for the proposed U.S.-Oman Free Trade Agreement (FTA), and to provide advice on how specific goods and services and other matters should be treated under the proposed agreement. Persons wishing to testify orally at the hearing must provide written notification of their intention, as well as their testimony, by January 5, 2005. A hearing will be held in Washington, D.C. beginning on January 14, 2005, and will continue as necessary on subsequent days. Written comments are due by noon, January 25, 2005. For more information, please consult the Federal Register notice.

Request for Comments, Notice of Public Hearing on Proposed U.S.-UAE FTA

In a Federal Register notice , the Trade Policy Staff Committee (TPSC) notes that it will convene a public hearing and seek public comment to assist USTR in amplifying and clarifying negotiating objectives for the proposed U.S.-Oman Free Trade Agreement (FTA), and to provide advice on how specific goods and services and other matters should be treated under the proposed agreement. Persons wishing to testify orally at the hearing must provide written notification of their intention, as well as their testimony, by January 5, 2005. A hearing will be held in Washington, D.C. beginning on January 12, 2005, and will continue as necessary on subsequent days. Written comments are due by noon, January 25, 2005. For more information, please consult the Federal Register notice.

Treasury's Quarles Urges Indonesia to Improve Investment Climate

During his December 2 visit to Jakarta, Assistant Treasury Secretary Randal Quarles stated that Indonesia’s principal challenge is to restore investment and growth back to the levels they were prior to the financial crisis of 1997. Quarles warned that investors "are deterred by high-profile and unfavorable court decisions, corruption, conflicting regulations, and tax administration issues." He called efforts to review conflicting government regulations and to reduce bureaucratic obstacles "welcome first steps in addressing this important issue." Quarles also expressed appreciation for joint efforts between the government of Indonesia and Bank Indonesia to strengthen anti-money-laundering and counterterrorist-finance laws.

View USIS Washington File report