USITC Considers Tariff Relief for Pharmaceutical Products

The US International Trade Commission (USITC), an independent federal agency, is initiating a review of more than 700 pharmaceutical products and chemical intermediates to be considered for duty elimination. The products under consideration would be added to the Pharmaceutical Appendix to the Harmonized Tariff Schedule of the United States, a list of products subject to duty-free treatment.

The review is part of the Pharmaceutical Zero-for-Zero Initiative, which became effective in 1995 through the adoption by Congress of the Uruguay Round Agreement Act, which implemented the results of the Uruguay Round negotiations of the World Trade Organization. Under the Pharmaceutical Zero-for-Zero Initiative, the United States and its major trading partners eliminated tariffs on many pharmaceuticals, their derivatives, and certain chemical intermediates used to make pharmaceuticals. The US list of pharmaceutical products and chemical intermediates eligible for duty-free treatment is given in the Pharmaceutical Appendix to the Harmonized Tariff Schedule of the United States. The Pharmaceutical Appendix is periodically updated to provide duty relief for additional products, including newly developed pharmaceuticals.

Under the auspices of the Pharmaceutical Zero-for-Zero Initiative, the US and other participants eliminated duties on 496 pharmaceutical items in the first update in 1996, 642 items in the second update in 1998, and 823 items in the third update in 2006. Participants in the Pharmaceutical Zero-for Zero Initiative are now conducting a fourth review to determine if products can be added. In a letter to USITC Chairman Shara Aranoff, Ron Kirk, US trade representative, requested that the USITC provide information relevant for this review by Sept. 1, 2010. The letter also provides the list of products under consideration in the review.

In a press release, The Society of Chemical Manufacturers and Affiliates (SOCMA), advised its members of the review. SOCMA is the US-based trade association representing batch and custom manufacturers, including contract manufacturers of active pharmaceutical ingredients and intermediates. As part of the review, the USITC is seeking written input on the products being considered for duty-free treatment from interested parties. Written submissions, which should focus on the levels of exports and imports for the items under consideration, should be submitted no later than July 14, 2010.