April 13, 2005
U.S. Senator Charles E. Grassley (R-Ia) Holds Hearing On United States-Dominican Republic-Central America Free Trade Agreement
GRASSLEY: Senator Wyden?
WYDEN: Thank you very much, Mr. Chairman. I commend you and Senator Baucus for getting us started on this effort. I'm one of thefew people here who's willing to call themselves a free trader, and Iwill tell you that as a free trader I'm still very troubled by thefact that trade policy seems in the last few years to be deemedtransformed from an opportunity to open foreign markets to ourproducts into a vehicle for special interest policies.
And I'm going to talk to you in just a minute about one thatconcerns me very much. I think the agreement as it stands now is ahuge giveaway to brand name pharmaceutical firms. I'm going to askyou about that shortly.
But first, I want to talk about something I heard just ten daysor so ago at home, and that involves the sugar situation. In ourarea, 300 workers at Amalgamated Sugar were just certified as eligiblefor trade adjustment assistance. We've got 80 sugar beet farms, 100sugar beet seed farms, most of them in Eastern Oregon.
A layoff of 100 people in a small part of the rural west --that's enormous, and that's happening even before CAFTA. What kind ofassurance can you give those sugar beet growers in Oregon who areexpecting somebody who is pro-trade to stand up for them?
ALLGEIER: Well, first of all, let me say that we have workedvery, very hard to provide new markets for agricultural interests, andof course, in the case of Oregon things like apples and pears areextremely important, and we've got an immediate...
WYDEN: The question is about sugar, sir.
ALLGEIER: No, I'm going to get to that. I will. But we have atwo-prong approach, A, to open up as many markets as possible, and B,to be extremely sensitive where we have products such as sugar, andthat's why in this chart here you can barely see the amount of sugar-- the percentage of sugar that would come in if the CAFTA countriesuse the full measure of sugar that they're provided in this agreement.You can barely see it on that chart.
And there are the other protections that I've mentioned before,that we are not increasing the tariff, the out-of-quota tariff, atall. We have the compensation mechanism. We're taking very strongmeasures to ensure that countries do not substitute someone else'ssugar for their sugar.
WYDEN: Well, I'm going to send Oregon's sugar beet growersaround to visit with you, because...
ALLGEIER: I'd be happy to.
WYDEN: ... they certainly don't think that's the case.
Let me turn to the question of the pharmaceuticals. In 2002, theGeneral Accounting Office found that essentially people with a publichealth background have been locked out of your trade advisorycommittee process.
As far as I can tell, there is a huge dominance by brand namepharmaceutical manufacturers. My understanding is it's something likeover two-thirds of the representatives are brand name people. But myquestion to you in particular is about this outrageous way in whichyou give the brand name people even more protection under CAFTA.
The way it works is most companies, of course, seek marketapproval for drugs here in the United States. The company gets theapproval in the United States, and under U.S. law gets five years ofprotection of this data in CAFTA countries.
At the very end of the five years, the brand name company thenhopscotches to one CAFTA country and gets at least an additional fiveyears of market exclusivity simply by hopscotching somewhere else andseeking approval in that market.
And so because the language of the agreement is so favorable tothese brand name companies and is so murky, it might even be possiblefor a brand name drug company to essentially hopscotch all over theworld getting five more years here and five more years, you know,there, and who knows how many years of exclusivity they're going toget.
Now, what could possibly be in the public interest aboutsomething like that?
ALLGEIER: OK, two things. First of all, we have not doneanything in the CAFTA to alter the provisions that countries haveunder the TRIPS agreement with respect to access to medicines. Inother words, we haven't changed the period under which there isprotection of data.
What we have done in this agreement is conscientiously followedthe guidance that we have been given in trade promotion authority,which is to provide a balance between the protection for innovation,which -- if you look at the Jordan agreement, some 40 new drugs havebeen introduced in Jordan since that agreement -- but to balance thatwith the legitimate need of governments to meet the public healthneeds of their countries, including, specifically, access tomedicines.
So we have followed scrupulously that balanced guidance that wehave from TPA and incorporated that into the CAFTA.
WYDEN: I will just tell you that we've looked at several of theagreements -- for example, Australia and NAFTA -- and there is noquestion in our mind that there is more protection for brand namecompanies in this. I'm going to furnish that to you in writing.
But throughout this administration, the brand name folks havedone awfully well, and that has not been in our interest in thiscountry or overseas. This agreement takes it to new lengths.
And I'll just tell you, I'm one of the people that you've got toget in support of to have any chance of passing this. I have votedfor all the trade agreements, the major ones, in the past and have thewelts on my back to show for it.
But unless, you know, I can tell agricultural concerns in Oregonthat we're being responsive to their needs, and you do something aboutthe egregious favoritism for these special interests that's in thisagreement, I won't be able to go along.
So I look forward to working with you. I'd like to be in thecamp that has supported free trade and have worked closely withSenator Baucus in particular and Senator Grassley on this, but you'vegot a ways to go to convince me this time.
Thank you, Mr. Chairman.
ALLGEIER: Thank you. I would welcome the opportunity, SenatorWyden, to sit down with you to talk about agriculture and also aboutpharmaceuticals at a time that is convenient for you.