Free Trade Area of the Americas - FTAA

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Trade Negotiations

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October 27, 2003

Original: Spanish
Translation: FTAA Secretariat



Name(s) José Manuel Álvarez Zárate, Guillermo Vargas Ayala, Carlos A. Villamizar
Organization(s) Asociación de Industrias Farmacéuticas Colombianas ASINFAR [Colombian Pharmaceutical Industries Association]
Country Colombia


Executive Summary

The different FTAA negotiating groups have focused efforts on preparing a final draft of the Agreement that must include the objectives and instructions issued by the Presidents and Ministers, in such a way that the latter are reflected on the development of issues in the chapters.

Agriculture has been one of the most problematic issues. This has been largely due to, among other things, the significant weight that it carries in the national economies, the social and political sensitivities it generates and represents (i.e., the relationship between agriculture, guerrillas, and drug trafficking in Colombia), and its status as to the various trade practices (i.e., subsidies and internal aid), in several FTAA-level developed countries (DCs).

Section 5 of the Chapter on Agriculture, on Sanitary and Phytosanitary Measures, notably impacts the actual export potential of both the national production sector and society as a whole. This refers to all laws, decrees and rulings, orders and proceedings to protect human and animal life and health or to preserve plant life. Said legislation seeks to diminish the risks arising from the presence of additives, pollutants and toxins, and from the entry, settling or spreading of pests or diseases, and addresses all aspects related to food safety1, pharmaceuticals, agrochemicals, cosmetics, liquors, etc., without affecting trade in goods.

This area covers the relationship between sanitary and phytosanitary measures (SPS) and the pharmaceutical and agrochemical sector, given the fact that an SPS agreement will eventually define which registration, quality control and safety processes will be required for medication, pesticides and other generic products in the FTAA market, which will influence the access of our products as well as their permanence in the domestic market. This Chapter will have a positive or negative impact on the production and competitiveness of medication and agrochemicals, to which the national industry has contributed significantly in terms of production activity, competitiveness, and a fairly respectable index of employment generated.

Upon analyzing the dynamics of market access-related negotiating groups and the actual fulfillment of the objectives defined by the summits and the TNC for each one, the outlook for Developing Countries (DPs) to participate in trade in an effective, non-discriminatory manner is evidently still in question.

The method of implementing market-access objectives, such as the elimination of non-tariff barriers and other measures of equivalent effect that restrict trade among FTAA countries once the Agreement enters into force,2 has not been clearly defined. This will lead to a situation in which the barriers to our products will not be eliminated, added to the fact that, with barely one year left for negotiations, it is impossible to accelerate the process of identifying non-tariff measures.

The same holds true for agricultural concerns with set objectives, such as ensuring that sanitary and phytosanitary measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries or a disguised restriction to international trade, in order to prevent protectionist practices and facilitate trade in the Hemisphere (a comprehensive inventory of FTAA measures, which is a necessary starting point for any serious negotiation, has not been performed). It must be recognized that countries disguise new possible ways of imposing barriers by requiring assessment procedures, quarantine methods, decrease in SDT, among others.

In fact, the progress made in the clear-cut definition of mechanisms to facilitate proper implementation of the WTO Agreement on SPS, the consolidation of a complete inventory of FTAA measures, or the clear treatment in the chapters on access and agriculture to prevent SPS measures from “constitute[ing] a means of arbitrary or unjustifiable discrimination between countries or a disguised restriction to international trade”, are still principles whose clarity and importance have yet to be reflected in the draft Agreement. This generates uncertainty as to the treatment and completion of a framework that would benefit Colombia in terms of real access to its products through SPS.

All of this heralds a finalized Agreement that will be far from comprehensive, fair and equitable, whose implementation in the Hemisphere is adjusted to the different needs, levels of development and size of economies; rather, it will have a notably negative impact on the economies, Colombia’s among them.

As to the negotiation of SPS, issues such as harmonization or leveling of technical standards include articles that are detrimental to the country, such as imposing higher-level requirements that may generate a terrible trade imbalance between our countries and developed countries; the equivalence concept lacks a clear-cut definition and coverage, thus causing even more uncertainty about its ultimate application within the scope of the Agreement.

Furthermore, regarding risk assessments and adequate levels of sanitary and phytosanitary protection, it is clear that there is ambiguity as to which criteria are used to determine adequate levels of protection (and whether these are in keeping with country’s technical and operational capacity to respond within the agreed period of time).3 This opens the door for other countries to demand requirements from our exporters, under the pretext of assessing risks or establishing product categories, that their own authorities do not usually require or that are not included in or allowed under the Agreement, which may well end up becoming barriers to trade.4

Finally, issues as important to agricultural countries like Colombia, such as those related to the inclusion of pest- or disease-free areas; control, inspection and approval procedures; and special and differential treatment (SDT), merit significant follow-up given their implications for national treatment, reciprocity, implementation according to needs, size and development levels of the economies, and the recognition of geographical and weather conditions unlike those of member countries.

In summary, the current status of the draft SPS opens the door to maintaining and implementing restrictive measures that restrict the entry of goods to a specific country, which considerably affects the potential domestic exporter, thereby decimating the efforts of the production sector and the government to adjust to international standards in the last few years.

This way, the Ministry of Trade, Industry and Tourism must move toward signing SPS-related commitments that will not become direct or indirect barriers to trade or fail to adopt major standards that would impose methods and systems that are foreign to the country’s geographical, production and development conditions.

1  As established by the Codex Alimentarius.

2 There still is no timetable, where appropriate, for the elimination, reduction, definition, further definition, further adjustment and/or prevention of non-tariff barriers, as suggested by the Buenos Aires Ministerial Meeting (2001).

3 Neither is it known who will be in charge nor how assessments will be conducted.

4 It is unclear how these assessments will be conducted or who is qualified to conduct them.

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