EN Official Journal of the European Union CE 88/689

(2004/C 88 E/0708)

WRITTEN QUESTION E-0213/04

by Sir Robert Atkins (PPE-DE) to the Commission

(30 January 2004)

Subject: The Pharmaceutical Tariff Elimination Agreement (Zero for Zero)

The Pharmaceutical Tariff Elimination Agreement was agreed by 22 countries (1) during the Uruguay Trade Round and entered into force on 1 January 1995. It has meant the elimination of tariffs on thousands of pharmaceutical entities and includes a commitment not to replace tariff barriers with non-tariff barriers and even extends to cover products imported from states not signatory to the Agreement. All finished pharmaceutical products (2) are automatically covered by the Agreement, however, active ingredients and intermediates (used in the manufacture of finished pharmaceuticals) do not automatically qualify for zero tariffs and must be formally added to the list of eligible products.

During Uruguay, signatories to this Agreement undertook to update the list of products covered by the Agreement at least once every three years in order to include new active ingredients and intermediates that have been developed since the Agreement was signed. The second update entered into force in July 1999 (3), meaning that the third update (Update III), should have been completed 18 months ago. Since the 1999 update, thousands of new products have been developed which are waiting to be recognised as eligible for zero tariffs.

In parallel, WTO negotiators could consider simplifying the methodology to ensure that future updates are no longer necessary and to encourage more WTO member states to join the Agreement. Such an initiative would fall under the new trade round and, while welcome, should not prevent or further delay the speedy conclusion of the already long overdue update committed to during the Uruguay Round.

Could you explain what stage the EC has reached with the third update to the Pharmaceutical Tariff Elimination Agreement, due to be completed 18 months ago under the timetable agreed during the Uruguay Round? Could you detail when the update process is due to be completed?

Answer given by Mr Lamy on behalf of the Commission

(10 March 2004)

The ‘Pharmaceutical Tariff Elimination Agreement’ is a non-binding arrangement between the most important pharmaceutical producing countries to reduce their World Trade Organisation (WTO) bindings of duties on certain pharmaceutical products, including active ingredients and intermediate products, to zero. Because new pharmaceutical products are constantly being developed, the arrangement envisages periodic reviews of these products. Any of the participants could have launched the process for the third update (Update III) which was due to be completed in 2002, even if it was indeed the EU that proposed and took forward the previous two updates. Given the interest of the EU Pharmaceutical industry, the Commission is actually considering launching Update III.

As regards the simplification of the updating procedures as well as the extension of the Agreement to other WTO Members, the Commission shall certainly consider such options if they were to be in the wider interests of the EU within the Doha Development Agenda.

(1) Australia, Canada, Czech Republic, European Communities, Japan, Norway, Slovak Republic, Sweden, Switzerland, United States.

(2) The Agreement refers to items classified in Chapter 30 of the Harmonised Tariff System (which includes all finished pharmaceutical products).

(3) With the exception of Japan where it entered into force in June 2000.