Colombia makes move on drug price

With help from Doug Palmer, Victoria Guida and Jason Huffman

COLOMBIA MAKES A MOVE ON DRUG PRICE: The Colombian government seems to be facing its fears in announcing it will issue a “declaration of public interest” lowering the price on imatinib, a drug sold under the brand name Gleevec that is used to treat leukemia and other cancers. The decision stops short of a compulsory license that would have stripped the drug’s patent to allow for generic production — Colombia had feared that move would lead the U.S. to pull financial support in other areas, such as Colombia’s peace talks. Colombian embassy officials previously complained of pressure from U.S. congressional staff over the issue.

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The declaration was prompted after negotiations between the government and the drug’s manufacturer, Swiss-based Novartis, broke down, Colombian Health Minister Alejandro Gaviria told reporters Thursday at a conference in Cartagena.

The U.S. Chamber of Commerce condemned the action late Thursday, saying it moves Colombia closer to the more drastic action of issuing a compulsory license.

“These actions are inconsistent with Colombia’s history as a stable, pro-growth economy. We urge the Government of Colombia to abandon this destructive course and reject Minister Gaviria’s declaration,” David Hirschmann, president of the Chamber Global Intellectual Property Center, said in a statement.

IT’S FRIDAY, JUNE 10! Welcome to Morning Trade, where if you have ever wondered where $100 worth of gas could get you, this might give you some ideas for a summer getaway. Care to fuel us up with some good trade news? Let me know: or @abehsudi.

SINGAPORE: TPP FAILURE DANGEROUS FOR AMERICA: Singaporean Foreign Minister Vivian Balakrishnan was in Washington this week to convince lawmakers of the importance of the Trans-Pacific Partnership. His message: Failure on the part of the U.S. to ratify the deal could be “very dangerous” to America’s standing in the Asia-Pacific region.

“What is at stake is American credibility, and there are many leaders in Asia that have gone out on a limb to support the TPP,” he said Thursday afternoon at the Center for Strategic and International Studies. “If having marched everybody up the hill, you march down now, it would have been better if you never even started on this journey. Getting it passed now is absolutely crucial.”

After two days of discussing the TPP with lawmakers on Capitol Hill, Balakrishnan said he detects an understanding of the deal’s merit but political reluctance to support it.

“Frankly, my sense of it is at an intellectual level everyone knows it makes sense, it ought to be done. No one seriously argues with me against it at an intellectual level,” he said. “Yet I know as a politician this is one of those things that people hope gets done but without their fingerprints on it, without having to pay a political price for it. But in life everything meaningful, everything significant does require effort and there is a price to be paid.”

NUNES SEES WRAP-UP OF TPP UNDER NEXT POTUS: Congress may as well start thinking about how it can work with the next president to get TPP passed, according to a key member of the House Ways and Means Committee.

“We’re going to have to, as a Congress, work with whoever the next president is to make sure this TPP deal ultimately gets done, [and] it’s a better deal for the American people” than it is now, Rep. Devin Nunes said Thursday at the Council on Foreign Relations. The California Republican sits on the Ways and Means Trade Subcommittee and served as its chairman in 2014.

“As it stands right now, it can’t pass the Congress cause there’s not the votes,” he said. “The deal’s going to have to be changed.”

It would be “tough” for TPP to come up in the lame duck because the presidential candidates are running against it, Nunes told POLITICO after the event. But he said TPP is too important not to get picked back up eventually.

“It would help if the administration could start to make some changes and start to bring folks in, so we could maybe make some progress this year,” Nunes said. “Look … a lot of rhetoric’s out there, but ultimately these deals have got to be done, because, as I said up there, if not, China writes the rules, which means no rules.”

RYAN PROMOTES TRADE DEALS, MUM ON TPP: House Speaker Paul Ryan is calling for more trade deals as a way to boost national security but is staying mum about the massive, geopolitically significant TPP agreement waiting to be ratified by Congress.

“By delaying the development of strong trade deals, we give our competitors time to undermine the global system of trade that the United States has worked so hard to build,” Ryan and other House Republican leaders said in a national security proposal released Thursday.

Ryan’s proposal echoes many of the arguments the Obama administration has made for approval of TPP, without mentioning that pact or any other ongoing negotiation by name. No Republican leader has endorsed TPP and most Democrats oppose the deal.

“Countries like China and Russia are creating their own closed trading systems,” the House Republican document said. “A modern, successful strategy will break down the barriers to trade and investment, open markets, create opportunities for American businesses, and enable countries to grow their way out of poverty. These agreements create common, high standards for trade around the world and make it easier for U.S. workers to compete.”

EU COURT STRIKES DOWN ETHANOL DUTIES: U.S. ethanol producers scored a major victory Thursday when the European Union General Court ruled that EU antidumping duties on U.S. ethanol are invalid.

The 9.5 percent countrywide duty will remain in place pending an appeal from the European Commission, which has about two months to do so, the Renewable Fuels Association and Growth Energy said in a joint press release.

The court found that the duty of about $83 a metric ton was invalid because the commission applied one weighted average duty to all U.S. ethanol imports rather than separate duty rates for each of the major producers, as is common practice under EU law and WTO rules.

“The antidumping duty should never have been assessed,” RFA President and CEO Bob Dinneen said in the statement. “We feel vindicated and thank the EU General Court for its common-sense ruling.”

But European ethanol association ePURE pointed out that the ruling merely challenged the methodology for how the duties were applied to the largest producers, rather than finding that no duties should have been assessed. “ePURE welcomes the fact that the Court’s judgement did not put into question the legitimacy of the EU anti-dumping duties imposed on US ethanol,” ePURE Secretary General Robert Wright said in a statement. “We remain convinced that the measures have always been and still are fully justified.”

PUTTING NUMBERS ON CHINA MARKET ECONOMY DECISION: Granting China market economy status could require the United States, EU and other major economies to lower anti-dumping duties on $100 billion in Chinese exports, Chad Bown, a senior fellow with the Peterson Institute for International Economics, said in a new blog.

If the U.S. and others balk at making the change, the World Trade Organization could allow China to place retaliatory duties on $1 billion to $10 billion in imports from trading partners to compensate for the lost trade, Bown said.

The former World Bank economist estimated that 7 percent of China’s exports to G-20 economies, or roughly $100 billion worth, were subject to anti-dumping duties or other “temporary tariff barriers” at the end of 2013. The United States accounted for about $43.2 billion of that, the EU about $27.8 billion and India about $17 billion, Bown said.

China says the terms of its WTO entry require members to stop treating it as a non-market economy by Dec. 11, but the U.S. and many other nations are hesitant. Bown noted that upgrading China’s status doesn’t mean trading partners have to drop anti-dumping duties on its exports; they simply would have to adjust them or rely more on other temporary tariff barriers, such as countervailing duties or emergency safeguards. Read the blog here.

OPINION: THE EU IS TRYING TO GRAB ALL THE CHEESE: Clay Hough, the senior group vice president and general counsel of the International Dairy Foods Association, says the European Union is being more than a bit selfish in the position it’s taken on geographic indicators in Transatlantic Trade and Investment Partnership negotiations.

“In March, the EU released a list of more than 200 food products it believes should be covered by GI protections, including some of the most popular U.S cheeses,” Hough wrote in an opinion column for POLITICO’s The Agenda. “This represents approximately 14 percent of U.S. cheese production valued at approximately $4.2 billion per year. … The EU already ships $972 million of cheese to the U.S. annually while the U.S. ships just $6 million of cheese to the EU. The United States actually sells more cheese (just under $8 million) to the tiny nation of Trinidad & Tobago, population 1.3 million, than to the EU, population 508 million.” Read the rest of the op-ed here.

MORE PESSIMISM ON U.S.-CHINA BIT TALKS: A former Treasury official is the latest to offer a glum assessment about the chances of the United States and China reaching a deal this year on a bilateral investment treaty, despite news that Beijing will make a new offer next week in the long-running talks.

For there to be progress, Beijing would probably have to winnow down its “negative list” of the sectors it wants to keep closed to foreign investment to around 25 — and even that would be the basis for further tough negotiation, David Dollar, with The Brookings Institution, said Wednesday during a discussion at the Center for Strategic and International Studies.

“I guess I’m skeptical, in the context of Chinese politics, that they’re going to come with a really good offer next week,” Dollar said. Meanwhile, CSIS scholar Scott Kennedy said he believes the next administration will have to finish the talks. “I don’t know if the United States would take ‘yes’ for an answer even if it was an extremely short list, given the political climate right now in the United States and the emphasis on getting TPP through,” Kennedy said.


— U.S. Undersecretary of State Catherine Novelli urges Cambodia to pursue a bilateral investment treaty with the U.S., the Phnom Penh Post reports.

— A U.S. official puts pressure on Liberia’s House of Representatives to pass legislation that would ratify the country’s accession to the WTO, Front Page Africa reports.

— Texas cotton producers, facing low commodity prices and less subsidies as a result of the Brazil WTO case, are feeling the heat, the Houston Chronicle reports.

THAT’S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: and @ABehsudi; and @vtg2; and @tradereporter; and @mjkorade; and and @JsonHuffman. You can also follow @POLITICOPro and @Morning_Trade.

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