Subject: From the Newsroom

From: [email-masked] (jingles)
Date: Mon, 27 Oct 2003 07:47:14 GMT

I think this topic has raised its head before....

"Drugs threaten US trade deal
By Roy Eccleston and John Kerin
October 27, 2003

A NEW row over Australia's national cheap drug scheme is threatening
efforts to clinch a US free trade deal by the Christmas deadline.

As officials from both nations hold talks in Canberra this week, The
Australian has also learned the latest offer by US negotiators would
mean up to 80per cent of American farm produce would be off- limits to
Australian competition in the first year. 

The offer - which would open up only one-fifth of US primary industry
- would mean sensitive areas such as beef, sugar and dairy were
off-limits. Australia's $5billion-a-year Pharmaceutical Benefits
Scheme provides subsidised drugs to consumers at affordable prices,
but it is under attack from the powerful US drug company lobby because
the industry claims it depresses the prices. 

US President George W. Bush also raised concerns with John Howard
during talks in Canberra on Thursday about the political difficulties
he faces in the US over perceptions drug prices are too low in
Australia. 

But he has instructed US negotiators to get a deal by the end of the
year. 

Any relaxing of restrictions on the approval and pricing process for
the $4billion-a-year subsidised drugs scheme is politically sensitive
for the Prime Minister because it would mean higher drug prices for
Australian consumers. US Trade Representative Robert Zoellick has
referred to Australia's PBS as a "pharmaceutical protection system",
signalling the US wants changes. 

He has also expressed concern about Australia's quarantine system and
restrictions on foreign investment. 

"(We have) issues dealing with foreign investment, dealing with
cultural carve-out, dealing with (Australia's) pharmaceutical
protection system as well as a series of market access issues," Mr
Zoellick said at the APEC summit in Bangkok last week.

But Health Minister Tony Abbott said yesterday the PBS would not be
negotiated away in a free trade agreement. 

"The Pharmaceutical Benefits Scheme will not be a bargaining chip in
these negotiations and frankly, it shouldn't be, because the (PBS)
does not discriminate between overseas and locally produced drugs," Mr
Abbott said. 

"It is not a trade instrument ... it is an instrument for ensuring
that Australians get reasonable access to affordable drugs." 

Trade Minister Mark Vaile maintained the US had only formally
registered concerns about delays in getting products approved for the
Australian market, rather than the structure of the scheme. 

Mr Zoellick also revealed in Bangkok last week that the US did not
propose an immediate major increase in market access for Australian
farmers. 

He said under the latest US offer on agriculture - already described
as inadequate by the Howard Government - lamb and "some 21per cent of
our products" would have protection eliminated in the first year. But
Australian officials pointed out lamb had virtually no tariff now in
the US - and the comment suggested that almost 80per cent of American
farm products would initially retain existing levels of protection. 

Mr Zoellick did not say which products were in the 21per cent. But
they are almost certainly not the sensitive areas like beef, dairy,
sugar and cotton. 

For those, it appears the US would phase in increased access for
Australian products over years - possibly up to a decade or more. 

Trade negotiators from the US and Australia hold their penultimate
meeting in Canberra this week and the offers from both sides have been
kept from public view. 

Mr Vaile said yesterday there was a better than 50per cent chance of
negotiating an agreement by Christmas, but Australia needed to ensure
it was locked in before the US was distracted by domestic issues in
the lead-up to an election. 

The Australian"

jingles