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CETA will result in higher drug costs for Canadians: study

[ http://www.policyalternatives.ca/newsro ... ians-study ]

October 31, 2013

OTTAWA—The Comprehensive and Economic Trade Agreement (CETA) will result in significantly higher drug costs for Canadians, says a study released today by the Canadian Centre for Policy Alternatives (CCPA).

The study examines the latest revelations about the tentative trade agreement and finds it will:

- commit Canada to creating a new system of patent term extension that will delay the entry of generic medicines by up to two years;
- lock in Canada’s current terms of data protection, making it difficult or impossible for future governments to reverse them; and
- implement a new right of appeal under the patent linkage system that will create further delays for the entry of generics.

“On a per capita basis, Canadian drug costs are already the second highest in the world, after the United States. Under CETA, drug costs to Canadians are estimated to increase by between $850 million and $1.6 billion annually,” says Marc-André Gagnon, assistant professor in the School of Public Policy and Administration at Carleton University and one of the study’s co-authors.

According to the study, the federal government has promised to compensate the provinces for any additional costs related to CETA. However, that simply means that instead of Canadian taxpayers paying at the provincial level, they will be paying at the federal level. Importantly, people paying for their drugs out-of-pocket or through private insurance will be hit twice—through higher drug costs and their federal taxes.

“As drug costs continue to grow, there are limited choices: restrict the choice of medicines that the provinces can offer to their citizens; place more of the burden of costs on individuals, typically the elderly and the sick; or take money out of other places in the health system thereby threatening the viability of Medicare. Canadians should not have to accept any of these choices,” says Dr. Joel Lexchin, emergency physician and professor in the School of Health Policy and Management at York University, and co-author of the study.

“While we still don’t know all the details of the CETA, one thing is clear: the agreement will seriously impact the ability of Canadians to afford quality health care,” concludes Dr. Lexchin. –30–

CETA and Pharmaceuticals: Impact of the free-trade agreement between Europe and Canada on the costs of patented drugs is available on the CCPA website:
[ http://www.policyalternatives.ca/public ... aceuticals ]

For more information contact Kerri-Anne Finn,

CCPA Senior Communications Officer, at 613-563-1341 x306

http://policyalternatives.ca

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CETA will result in higher drug costs for Canadians

A new CCPA report, by Dr. Joel Lexchin and Marc-André Gagnon, examines the impact of the Comprehensive and Economic Trade Agreement (CETA) on pharmaceuticals. The authors find that the tentative EU-Canada trade deal will further tilt the balance towards the protection of brand-name drug manufacturers and their profits and away from Canadian consumers—resulting in significantly higher drug costs for Canadians. The study also examines the latest revelations about the tentative trade agreement, and asserts that the CETA will seriously impact the ability of Canadians to afford quality health care.

Read more in the report, CETA and Pharmaceuticals: Impact of the trade agreement between Europe and Canada on the costs of patented drugs.
[ http://www.policyalternatives.ca/public ... aceuticals ]

Want to read more about the CETA? Scott Sinclair, director of CCPA's Trade and Investment Research Project, asks ten questions about the EU-Canada free trade deal that will help Canadians gain a better understanding of what is at stake.

Read his commentary: Ten questions about the CETA.

[ http://www.policyalternatives.ca/public ... about-ceta ]

Compromises on both sides led to ‘excellent deal’ on European trade, Stephen Harper says

[ http://o.canada.com/news/harper-announc ... ree-trade/ ]

Jason Fekete Published: October 18, 2013, 7:30 am

BRUSSELS, Belgium – Canada and the European Union say both had to make “compromises” to get agreement on a sweeping free-trade deal that will give Canadian businesses preferential access to an EU market of 500 million people and save consumers money.

The agreement prompted a flurry of praise from across the spectrum of business groups, but the official Opposition warned that no one has yet seen the fine print.

“New Democrats have said all along that when it comes to trade deals, details matter,” NDP trade critic Don Davies said in a statement Friday. “Despite today’s announcement of a deal, the government still has not shared the text of this agreement with Canadians.”

Prime Minister Stephen Harper’s abrupt announcement this week that the agreement in principle was imminent caught many off-guard after months of what had appeared to be stagnation in the trade talks.

But it was a smiling Harper who announced in Brussels Friday that a deal in principle had been reached.

Once in place, it will be the largest trade agreement in Canadian history and swing open trade doors in an EU region with $17 trillion in annual economic activity. The government believes it will result in cost savings for consumers.

“There’s always offensive and defensive interests. There are always gains and there are always compromises,” Harper said at a news conference with European Commission President José Manuel Barroso at the European Commission headquarters in Brussels.

“This agreement is vastly positive for the Canadian economy across the board,” Harper added. “It is not a perfect deal, because it’s a deal. But it is not just a good deal; it’s an excellent deal.”

- - - SNIP - - -

Here’s what the agreement in principle means for a variety of groups and sectors in Canada:

Beef, pork and bison producers in Canada: The agreement, once it takes effect, will give Canadian farmers yearly duty-free access into the EU for up to 50,000 tonnes of beef (including 70 per cent fresh, 30 per cent frozen), 80,000 tonnes of pork, and 3,000 tonnes of bison. An existing duty on a high-quality beef quota of 15,000 tonnes will be removed, bringing total duty-free beef access to around 65,000 tonnes.

Supply management for dairy, eggs and poultry: Poultry and eggs are excluded entirely from CETA, but Canada will more than double the amount of EU access into the Canadian cheese sector to around 30,000 tonnes annually. Canada will get unrestricted access to the EU’s dairy sector.

Federal officials say financial compensation will be made available to Canadian cheese producers adversely affected by the deal.

The Canadian supply management system protects around 17,000 dairy and poultry farmers, handing them production quotas and shielding them with a tariff wall in a system that ultimately forces Canadians to pay inflated prices for products such as milk, cheese, chicken and eggs.

The CETA “will not affect Canada’s supply management system,” according to a summary of the deal, and will maintain Canada’s production, import and price controls.

Automotive sector: Tariffs will be eliminated over seven years, ultimately meaning reduced prices on vehicles coming from Europe. On passenger vehicles, the EU’s 10-per-cent tariff will be eliminated, while tariffs up to 4.5 per cent on auto parts will also be axed. The deal would allow for up to 100,000 passenger vehicles to be exported to Europe, more than a 12-fold increase over current average exports of 8,000 to 10,000 cars.

Government procurement: Many major Canadian cities asked for exemptions from CETA, worried it could limit their abilities to adopt “buy local” procurement policies. The CETA rules will allow the EU to bid on contracts of $7.8 million or more for construction services, about $631,000 for procurement by utilities entities and approximately $315,000 or more for goods and services contracts. Canada will get greater access to Europe’s $2.7-trillion annual procurement market.

Agriculture and agri-food: The sector employs more than 585,000 Canadians. CETA will eliminate duties on nearly 94 per cent of EU agricultural tariff lines, including durum wheat, other wheat, and oils (including canola oil), which will be of biggest benefit to Alberta, Saskatchewan, Mantioba, Ontario and Quebec.

Forest and value-added wood products: Canada is the world’s leading exporter of softwood lumber, newsprint and wood pulp. The agreement, once it takes effect, will eliminate existing tariffs on all forest products, which range from seven to 10 per cent on plywood.

Fish and seafood products: Canada will be forced to eliminate, over three years, minimum processing requirements on exports to the EU, which has been a major concern to Newfoundland and Labrador. The province had demanded that fish and seafood caught in the province be processed there.

Upon taking force, nearly 96 per cent of EU tariff lines for fish and seafood products will be duty-free, and all tariff lines will be duty-free after seven years. Tariffs ranging from six to 20 per cent will be eliminated on products such as live and frozen lobster, peeled shrimp and frozen scallops.

Intellectual property (IP) protection: The deal reflects what the government says are “emerging international standards” on intellectual property rights. Provinces have been worried that stronger IP rules could cost them potentially billions of dollars more in pharmaceuticals and delay access to cheaper generic drugs. CETA will grant an additional two years of patent protection on brand-name drugs that face lengthy reviews.

Harper said the government will compensate provinces for the higher drug costs, although there won’t be any impact for at least eight years.

CETA will include a wider recognition of EU geographical indications for certain meats and cheeses that will bear regional names when sold here.

Foreign investment: CETA establishes rules demanding investors be treated equitably and no less favourably than domestic or other foreign investors. In the event of an “unlawful expropriation,” such as a government seizing a company’s investments without compensation, an “investor-to-state dispute settlement” will allow investors to seek compensation from governments. An independent arbitration panel will rule on the investor’s claims.

Canada has agreed to increase to $1.5 billion the threshold for reviewing foreign acquisitions of Canadian firms by European companies. All EU takeovers under $1.5 billion would not be subject to review under the Investment Canada Act to determine whether they’re of “net benefit” to Canada.

Advanced manufacturing (including aerospace, rail products, machinery, electrical parts and equipment): Upon taking force, CETA will eliminate most existing EU tariffs on advanced manufacturing products, which are as high as 22 per cent.

Metal and mineral products: The agreement will eliminate existing EU tariffs on metal and mineral products, such as aluminum, nickel, iron, steel and other metals.

Some of the final politically sensitive issues that needed to be resolved centred on the amount of duty-free Canadian beef going into Europe and how much access the EU would get to Canada’s supply managed dairy sector.

A handful of the other final trade irritants included: EU demands for stronger intellectual property protection on pharmaceuticals; market access into Europe for Canadian automobile and parts manufacturers; government procurement on infrastructure projects; and financial services and investment protection (including when investors can sue governments).

The dairy issue is extremely sensitive in Quebec, home to a large number of Canada’s dairy farmers and cheese producers.

Earlier this week, when news of an agreement first leaked out, the Dairy Farmers of Canada – which represents nearly 13,000 dairy farms in the country – said they were “angered and disappointed” with the Conservative government because the deal will more than double the amount of EU cheese allowed into Canada.

The Canadian Federation of Agriculture said it welcomes the export opportunities for domestic producers, but is disappointed the Conservative government “did not respect its balanced trade position and reach an agreement without seriously impacting Canada’s cheese industry.”

“We have always supported trade agreements that provide real market access increases, but never at the expense of another commodity,” CFA President Ron Bonnett said in a statement.

jfekete@postmedia.com Twitter.com/jasonfekete

Related articles - LINKS :

[ http://o.canada.com/news/harper-announc ... ree-trade/ ]

Stephen Harper’s European trade deal still needs provincial, parliamentary support (canada.com)

Will new trade pact with EU create jobs – or see them vanish? (globalnews.ca)

EU trade deal: Ontario will seek compensation for loss to industry (metronews.ca)

Dairy farmers cheesed off at reports Canada-EU trade deal near (o.canada.com)