[Congressional Record Volume 150, Number 105 (Wednesday, September 8, 2004)]
[Extensions of Remarks]
[Page E1528]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     UNITED STATES-MOROCCO FREE TRADE AGREEMENT IMPLEMENTATION ACT

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                               speech of

                          HON. HENRY A. WAXMAN

                             of california

                    in the house of representatives

                        Thursday, July 22, 2004

  Mr. WAXMAN. Mr. Speaker, I deeply value the close relationship 
between the United States and Morocco and the effort to strengthen our 
economic ties. Morocco is one of our strongest partners in the war on 
terrorism. The Kingdom, under the leadership of King Hassan II and now 
his son King Mohammed VI, has long been a steadfast supporter and key 
player in the Middle East peace process. Its recent designation as a 
major non-NATO ally is an important step toward further enhancing 
coordination between our countries on security issues.
  In many ways, this free trade agreement, or FTA, is a tribute to the 
significant economic and political reforms that Morocco has recently 
undertaken to stimulate growth and development. I strongly support the 
FTA's robust anti-piracy standards to protect the transmission of 
digital, satellite, and other copyrighted material, as well as broad 
market access for a wide array of audio visual products and services. I 
regretfully rise in opposition to this agreement, however, because of a 
number of other troubling provisions that could have profound public 
health consequences for the Moroccan people.
  At the crossroads between Africa and Europe, Morocco is actively 
engaged in the battle against the spread of the HIV/AIDS epidemic. With 
19 percent of its people living in poverty, the country's healthcare 
system is stretched thin and heavily reliant on the availability of 
generic drugs. It is shocking to me that despite this reality, the Bush 
administration's trade negotiators demanded intellectual property 
restrictions that will severely curtail Morocco's generic market.
  Most egregiously, the FTA requires Morocco to grant an automatic 
five-year monopoly to all new drugs introduced in the market, freeing 
them from competition with less expensive generic copies even if their 
patents have already expired. The Bush administration maintains that it 
negotiated the standard based on U.S. laws like Hatch-Waxman, which 
provides similar protections for new drugs introduced in the United 
States. But this is a distortion of the bill I co-authored. When Hatch-
Waxman was devised in 1984, virtually no generic drugs were available 
in the United States. The law was passed to increase competition by 
easing the approval of low-cost generics while providing specified 
periods of exclusive marketing to help pharmaceutical companies recoup 
development costs. In sharp contrast, Morocco is a country with a 
robust generic market where the introduction of this measure will only 
reduce competition and cause drug prices to soar.
  As a co-author of Hatch-Waxman, I cannot emphasize enough that this 
carefully balanced legislation represented a tailored solution to a 
specific regulatory problem in the United States. It is irresponsible 
for U.S. trade negotiators to apply the same policy in a developing 
country like Morocco whose generic drug market, health-care regulatory 
system, and public health needs look nothing like those in the United 
States.
  Although the Bush administration has cited the inclusion of similar 
provisions in the Jordan FTA as a precedent, there is clear evidence 
that the restrictions on the availability of generics have already had 
a terrible impact there. First, as the Wall Street Journal recently 
reported from an interview with the Executive Director of the Global 
Fund to Fight AIDS, AIDS drugs purchased in Jordan with Global Fund 
money cost an average of $7,000 a year per patient, compared with the 
average $250 to $400 paid in other countries. Second, the U.S.-Jordan 
FTA was signed before the WTO's Doha Declaration on trade and health 
authorized developing countries like Jordan to resist such regulatory 
changes and preserve access to affordable drugs for life-threatening 
diseases.
  Under this agreement, the Moroccan government could not import 
generic copies of drugs if domestic prices became too expensive because 
the FTA codifies U.S. and Moroccan laws that allow patent holders to 
block the importation of their product. Here in the United States this 
provision undermines the ongoing debate in Congress over the 
legalization of re-importation of low-cost drugs. In Morocco, however, 
it is much more damaging because it makes it impossible for Morocco to 
change its laws, as permitted by the Doha Declaration, to import drugs 
if a public health crisis arises.
  In the event of a public health emergency, the only recourse Morocco 
would have is to strip a drug of its patent and issue a compulsory 
license for another company to produce a generic copy and distribute it 
at a lower cost. Even then, however, Morocco would be vulnerable to a 
trade challenge because the FTA's investment chapter allows companies 
to sue for the expropriation of intellectual property. Although the 
agreement specifies that a challenge could not be made over the use of 
the patent in order to produce the generic copy, it does permit 
challenges over the use of a company's undisclosed safety and efficacy 
testing data to approve its distribution.
  The pharmaceutical industry has spoken openly about its efforts to 
raise drug prices and profit margins around the world. I do not think 
we should let drug companies use trade agreements to undermine the Doha 
Declaration and get health policy changes they could not otherwise 
achieve. Unfortunately, these provisions have become part of a cookie-
cutter mold that also appears in the recently negotiated U.S. FTAs with 
middle and high-income countries like Chile, Singapore, Australia, and 
Bahrain, as well as poverty-stricken developing countries like 
Thailand, Southern Africa, and the countries in the Andean and Central 
American regions.
  Another serious public health problem posed by the U.S.-Morocco FTA 
is its across the board cuts in agricultural tariffs that will 
eliminate Morocco's 25 percent tariffs on imported cigarettes. Although 
Morocco's 65 percent excise taxes on cigarettes will remain in place, I 
am disappointed that the FTA could increase cigarette consumption in a 
country where smoking is common among youth. In fact, in July 2002, I 
sent a letter asking the Centers for Disease Control a series of 
questions about the impact of tariff reductions in trade negotiations 
on cigarette consumption. After two years the letter has gone 
unanswered even as trade agreements with Morocco and Thailand have 
moved forward without regard to the crisis of tobacco addiction in 
these countries.
  I believe in the benefits of free trade, but not at the expense of 
public health. While I strongly support our alliance with Morocco and 
want to support this trade agreement, I cannot do so in good 
conscience. I hope that future trade negotiations will work for more 
progressive and forward-looking agreements that both expand markets and 
advance positions more respectful of our trade partners' public health 
needs.

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