Pharma "Zero For Zero" Tariff Scheme

16 January 1995

Leading world nations have agreed to a mutual elimination of prescription drug tariffs under the revised General Agreement on Tariffs and Trade, from January 1 (see also story opposite).

Signatories to the accord, which requires all pharmaceutical imports into a country which has signed it to be duty-free, providing that the exporting country is a GATT member, include the USA, Canada, the European Union, Austria, Switzerland, the Scandinavian countries and Japan. Other countries which are taking steps in this direction over the next five years, according to the Pharmaceutical Research & Manufacturers of America, are Korea, which says it will cut its pharmaceutical tariffs to zero over this period, Taiwan, which has pledged to eliminate some such tariffs, and Brazil and Argentina, which say they will cut their tariffs by as much as 65% over this time.

Under the agreement, the following are now duty-free between the signatories: all finished pharmaceuticals included within Chapter 30 of the tariff schedule; all unfinished products (including antibiotics, vitamins, hormones and alkaloids), all active ingredients with International Non-proprietary names assigned before December 15, 1993, and some salts, esters and hydrates, and; certain late-stage intermediates used in pharmaceutical manufacturing. In addition, update negotiations are due to take place this spring in order to include in the agreement active ingredients assigned an INN after December 15, 1993, plus certain pharmaceutical intermediates and a number of items accidentally deleted during the GATT talks.

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