Trade pact to change the rules
October 9, 2015 at 15:00
Trade pact to change the rules
Pacific deal would open markets and could lower prices, but it has critics
A cow at a dairy farm in Upton, Quebec. CreditMathieu Belanger/Reuters
By lowering trade barriers among the United States and 11 nations scattered around the Pacific Rim from Japan to Chile, the pact — which needs approval from Congress and lawmakers elsewhere to go into effect — is intended to help countries specialize in producing and exporting whatever goods and services they can make most efficiently, while relying on imports for others. In the long run, that could help modestly decrease some of the prices consumers see in stores.
But the details of the agreement are a complex hodgepodge of new rules, some of them intended to protect the way business is conducted by a number of powerful industries, while others will open the door to new markets.
Under the trade pact, the use of Chinese auto parts may expand. Credit Fabrizio Costantini for The New York Times
For American dairy farmers, the agreement means new opportunities to start selling some milk to Canada, a nearly closed market now. For cattle ranchers in the Midwest, the pact means a gradual reduction over the next 15 years in steep Japanese tariffs on beef imports that have protected Japan’s famous producers of tender but costly Wagyu beef.
One of the final sticking points to making a deal was agreeing on a standard for temporarily protecting the drugs made using biotechnology from competition. In the end, negotiators agreed to a five-year minimum period of market exclusivity in each country, plus options for additional years, before these drugs could face competition from cheaper imitations known as biosimilars.
“The agreement recognizes that we can travel on different roads but end up at the same outcome,” said Andrew Robb, Australia’s minister for trade and investment. Michael Froman, the United States trade representative, described it as “at least five years of data protection plus other government measures that can achieve a comparable outcome.”
The pharmaceutical and biotechnology industries had pushed for 12 years, the same period granted in the 2010 Affordable Care Act. The 12-year standard will remain in effect for the American market, but the pharmaceutical industry wanted that for all of the countries in the pact.
“We are disappointed that the ministers failed to secure 12 years of data protection for biologic medicines, which represent the next wave of innovation in our industry,” John Castellani, president of the Pharmaceutical Research and Manufacturers of America, said in a statement Monday. “This term was not a random number, but the result of a long debate in Congress, which determined that this period of time captured the appropriate balance that stimulated research but gave access to biosimilars in a timely manner.”
Critics of the pharmaceutical industry, while welcoming the shortening of the exclusivity period, said that the trade agreement as a whole would still impede access to affordable medicines, particularly for the less-developed countries in the pact.
Source: www.nytimes.com
