Healthy Skepticism Library item: 320

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Publication type: news

Kaplan J.
GOP gives green light to trade deal: Speaker Hastert has been sitting on bill for months
The Hill 2004 Apr 28

Full text:

House Republican leaders are planning to bring the U.S.-Australia free trade agreement to the floor after the Bush administration intensified its efforts in dealing with foreign countries on the contentious drug reimportation issues.

The deal between House GOP leaders and the administration to keep the Australia deal hostage no longer is another indication of how Hill Republicans are working more closely with the White House. Hill leaders, after months of bickering, have also brokered a tentative deal on the politically sensitive transportation funding bill.

Earlier this year, Speaker J. Dennis Hastert (R-Ill.) said the House would not consider voting on any trade agreements until the administration had pressed other countries to pay what he considers a fairer share of prescription drug costs.

Pharmaceuticals in foreign countries, such as Canada, tend to be less expensive because their costs are capped.

Now, after months of a full-fledged lobbying effort by powerful industry groups and pressure from some Democratic lawmakers, Majority Whip Roy Blunt (R-Mo.) told reporters yesterday that the House would vote on the Australia agreement “in the coming weeks.”

Some pro-free-trade Democrats, including Reps. Cal Dooley (Calif.), Ellen Tauscher (Calif.) and Jim Davis (Fla.), are hankering for a vote.

In March, they wrote Hastert a letter asking that he not delay a vote until the U.S. trade representative completed a report to address elements of foreign drug pricing.

John Feehery, Hastert’s spokesman, told The Hill that Hastert had not been opposed to the trade agreement, but added the speaker has been pleased that the White House has moved on five of seven requests with respect to drug pricing. It was unclear at press time what the outstanding requests entailed.

Feehery added, however, that no final decision has been made on the trade bill. Hastert, he said, is seeking movement on reimportation issues related to Canada.

Moreover, the Australia trade agreement includes a section on pharmaceuticals.

According to a summary on the U.S. trade representative’s website, the Australians agreed to make a number of improvements in their pharmaceutical benefits scheme, including setting up an independent review to enhance transparency and accountability. The two countries will establish a Medicines Working Group to “provide for continued dialogue.”

Blunt told reporters yesterday that these steps are unprecedented.

With only three more weeks until the Memorial Day recess in the House, the agreement could come to the floor as part of a series of “competitiveness” initiatives, such as tax, legal and regulatory reform that House Republicans are pushing over the next several months.

On May 11, the House will kick off an eight-week block of competitiveness measures with votes on legislation intended to reduce healthcare costs and improve access. Trade legislation, and the U.S-Australian agreement, could be voted on as part of that package.

Bill Morley, vice president of congressional affairs at the U.S. Chamber of Commerce, said the measure has broad and deep support among Republicans and Democrats and expects a vote in late June.

The leading brand-name pharmaceutical group is on board with the bill.

“We were hoping to get rid of all price controls,” said Mark Grayson, a spokesman for Pharmaceutical Research and Manufacturers of America.

The U.S. Trade Representative Robert Zoellick announced the agreement with the United States’ ninth largest trading partner in February. The agreement’s proponents say that it could provide an estimated $2 billion in increased exports of U.S. manufactured goods.

Moreover, this free-trade agreement has major advantages that other free-trade agreements usually lack. First, it is an agreement with an industrialized country so some lobbyists said that environmental and labor issues, usually sticking points in other trade agreements, were never on the table. The only other industrialized nation that the United States has a free-trade agreement is with Canada, since 1989.

“The administration has kind of cynically excluded the most painful things in it. It does not include all products, but it is a good one especially for manufacturing,” said Edward Gresser, director of the Trade and Global Markets Project at the Progressive Policy Institute.

“This ducks some of the harder issues, such as what are we going to do about farm subsidies,” and continues to protect the U.S. sugar industry.

Second, Australia’s drug policies are not as strict as Canada’s.

American companies are forced to sell drugs at discounted prices, but they have the option to sell them at full price, too.