Pharmaceutical Products and Chemical Intermediates ... - IFPMA

CHAPTER 1
Introduction
Purpose and Scope of Study
During the Uruguay Round trade negotiations, the United States and several of its major
trading partners agreed to eliminate tariffs on pharmaceutical products, certain
derivatives, and certain chemical intermediates used in the production of
pharmaceuticals. 1 This agreement is known as the Pharmaceutical Zero-for-Zero
Initiative (Initiative or Pharmaceutical Agreement). Effective January 1, 1995, the
Pharmaceutical Agreement eliminated tariffs in signatory countries on approximately
7,000 pharmaceutical products and chemical intermediates for all World Trade
Organization members on a non-discriminatory basis. In the Uruguay Round Agreements
Act (URAA), Congress authorized the President to grant duty-free treatment to new
pharmaceutical products and chemical intermediates through periodic updates to the
Pharmaceutical Agreement. 2 One of the requirements in the URAA is that the President
obtain advice from the U.S. International Trade Commission (the Commission or USITC)
about the proposed additions. 3 This report provides information about pharmaceutical
products proposed for the fourth update to the Pharmaceutical Agreement. 4 As requested
by the USTR, the report contains the following information: (1) a summary description
of the products currently covered under the Initiative, as set out in the Pharmaceutical
Appendix (Appendix) to the Harmonized Tariff Schedule of the United States (HTS), and
those proposed to be added to that Appendix; (2) an explanation of the relationship
between the various elements in the Appendix and the HTS; and (3) an estimate of
current U.S. imports and, where possible, current U.S. exports of the products included in
the current Appendix and the proposed additions to the Appendix, based on product
groupings as necessary. 5
1
Originally numbering 22, there are currently 34 signatories to the pharmaceutical agreement:
Australia, Canada, the EU-27 (Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia,
Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta,
Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom),
Japan, Norway, Switzerland, the United States, and Macao.
2
Section 111(b) of the Uruguay Round Agreements Act (URAA) (19 U.S.C. §3521(b)).
3
Section 115 of the URAA (19 U.S.C. §3521).
4
On March 12, 2010, the United States Trade Representative (USTR) published a Federal Register
notice (75 Fed. Reg. 11986) requesting public submissions of products to be included in the current update.
The list currently under review contains products drawn from these public submissions and from lists of
products proposed by other signatory countries. The original agreement has been updated three times—in
1997, 1999, and 2006. The Commission prepared reports for each of the previous three updates.
5
A copy of the request letter from the USTR, dated May 27, 2010, is included in appendix A of this
report. On August 6, 2010, USTR staff provided the USITC with non-substantive revisions to the list of
pharmaceutical products included with the request letter. The revised list is included in appendix A. The
Federal Register notice of the U.S. International Trade Commission’s initiation of this investigation, dated
June 15, 2010, is included in appendix B.
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