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IP/07/177

Brussels, 12 February 2007

Commission welcomes international agreement to boost trade in new pharmaceuticals

The European Commission has today welcomed the adoption by EU Member States of an international agreement which will make it easier to trade in pharmaceuticals. The third revision of the Pharma-GATT Agreement will eliminate customs duties among the main pharmaceutical trading nations and territories and will improve the competitiveness of the EU pharmaceutical companies. Over the last few years, the European Commission assumed a leading role in the negotiations towards the conclusion of this Agreement and its revision.

EU Trade Commissioner Peter Mandelson said: "This agreement puts free trade at the service of European businesses and consumers. It is a show of confidence in the global competitiveness of the EU pharmaceutical industry, and a signal of our commitment to ensuring that the modern trading environment is in step with innovation."

Thanks to the good cooperation between the pharmaceutical industry and the EU Customs experts, the third revision of the Pharma-GATT Agreement will eliminate customs duties applied on new pharmaceuticals (as well as on chemical intermediates used in the production of those pharmaceuticals) among the main pharmaceutical trading nations and territories. The European Union, the United States and Switzerland are part of the Agreement as from 1 January 2007. Japan is expected to apply this revision later this year. The Agreement is also open to additional Members.

In the review, 1290 new pharmaceuticals and chemical products have been added to the existing list of 7329 products benefiting from bound duty-free treatment upon importation into the EU.

The European Chemical Industry Council – CEFIC – has estimated the savings generated by the Agreement for EU pharmaceutical companies at around €230 million for the year 2007.

Background

Numerous pharmaceuticals and chemical intermediates already benefit from free trade under the terms of the WTO Pharma-GATT Agreement of 1994.

However due to recent and continuous scientific developments, particularly in biotechnologies, new pharmaceuticals and chemical intermediates were not covered by the Agreement.

The list of prefixes and suffixes, which can be used in combination with the names of the pharmaceuticals to describe their derivatives, has also been largely expanded and cleaned, making the system much more clear and flexible.

The duty-free pharmaceuticals will also be available on the European Customs Inventory of Chemical Substances (ECICS).

For more information: http://ec.europa.eu/taxation_customs/dds/en/ecicau.htm


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