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"FAST-TRACK" TRADE NEGOTIATING PROCESS ENDORSED

Executive Summary

"FAST-TRACK" TRADE NEGOTIATING PROCESS ENDORSED by the Senate Finance and the House Ways & Means Committees separately in May 15 markup sessions. The Senate committee rejected by a 3-15 vote and the House committee by a 9-27 vote resolutions to end executive branch authority to negotiate international trade agreements without formal review by Congress. Congress, which under the Constitution has authority to regulate U.S. commerce with foreign nations, in 1987 gave the Reagan Administration power to negotiate and finalize trade agreements. Authority for the fast-track procedure is due to expire in June. Because the government is in the midst of negotiations on a North America Free Trade Agreement and the General Agreement on Tarrifs and Trade, President Bush requested a two-year extension of the fast-track authority. The May 15 committee votes turned back proposed resolutions to deny the extension request. Pharmaceutical Manufacturers Association President Gerald Mossinghoff testified at a May 14 hearing of the Senate Judiciary/Patents Subcommittee that his association's board "unanimously supports" extending fast-track procedures for the Administration's negotiations on the North America Free Trade Agreement. Mossinghoff noted that PMA, the Industrial Biotechnology Association, the Nonprescription Drug Manufacturers Association, the Health Industry Manufacturers Association, the Chemical Manufacturers Association and other "high technology manufacturers" groups jointly sponsored an advertisement in the May 10 Washington Post to announce their support for fast-track authority for the Administration . However, the PMA president added, all the associations, "which represent really a very broad cross-section of high technology manufacturers," will "wait until we see . . . the final [NAFTA] agreement" before supporting the results of the fast-track negotiations. "We have every confidence in [U.S. Trade Representative Carla] Hills' ability and that of her staff," Mossinghoff said, but the trade groups' support "is not a decision on the final agreement, this is a decision to give her the opportunity to achieve what we hope will be a very successful final agreement." PMA initially withheld support for extending fast-track authority, despite a commitment from Mexico to enact pharmaceutical patent legislation, until the association received indications from the USTR and Mexico that Mexico would consider changing two provisions in patent legislation proposed by its legislature. One concern was the proposal's effective date, covering only drugs with patents granted after Jan. 16, 1987. The other was a parallel import provision, under which Mexico could import from any other country -- including one with no patent protection -- U.S.-patented products ("The Pink Sheet" April 29, p. 14). Judiciary/Patents Subcommittee Chairman DeConcini (D-Ariz.) asked whether PMA would oppose the final NAFTA agreement if Mexico's legislature enacts a patent law without changing the current proposal's provisions regarding the effective date or parallel imports. Mossinghoff replied: "We very well might." DeConcini added that he plans to write a "gentle" letter to the Mexican legislature "to call to their attention the importance" of the concerns about the proposed legislation raised at the hearing by PMA and other non-health-related witnesses. At a May 16 hearing before DeConcini's subcommittee, Pfizer VP-General Counsel C.L. Clemente, representing the Intellectual Property Committee, said the IPC "strongly supports" fast-track extension. "Too much is at stake to give up on a negotiating process that has served us well and that offers us the opportunity to achieve trade agreements that will serve the long-term interests of the U.S." Clemente testified the IPC is "optimistic that our negotiators will be able to bring back a comprehensive [trade-related intellectual property] agreement with the strong standards of protection and enforcement that we can support." Clemente added that continued cooperation among the private sector, the Administration and Congress will"ensure a successful outcome of the Uruguay Round negotiations on intellectual property." Besides Pfizer, pharmaceutical manufacturer members of the IPC are Bristol-Myers Squibb, DuPont, Johnson & Johnson, Merck and Monsanto.
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