By Nam Hyun-woo
The tug-of-war between Korea and the United States over trade is expanding into diverse industries, with U.S. drug makers calling on their government to address “discriminatory barriers” against them in Korea.
The Pharmaceutical Research and Manufacturers of America (PhRMA) filed its 2018 submissions for the Office of the U.S. Trade Representative’s (USTR) annual Special 301 Report, urging it to take “immediate action to address serious market access and intellectual property barriers in 19 overseas markets.”
In the submission the PhRMA asked the USTR to designate Korea, Canada and Malaysia as Priority Foreign Countries which deny “fair and equitable market access for U.S. products.”
The USTR will issue its Special 301 Report in April. In the report, the USTR identifies trade barriers against U.S. companies, naming countries that do not provide “adequate and effective protection of intellectual property rights” or “fair and equitable market access to the U.S.”
If a country is designated as a Priority Foreign Country, it is judged to have inadequate intellectual property laws and can be subject to sanctions. The report also has Priority Watch List and Watch List designations for countries whose intellectual property regulations are deemed of concern.
Following the first report in 1989, Korea has had a history of being listed on the watch lists, but has not been since 2009. Also, the country has never been subject to the worst designation of a Priority Foreign Country, according to data compiled by the International Intellectual Property Alliance.
“Discriminatory pricing policies in Canada, Korea and Japan and compulsory licensing in Malaysia are threatening American jobs and exports,” PhRMA Senior Vice President for International Advocacy Brian Toohey was quoted as saying to the association.
“Countries that blatantly disregard trade rules to benefit their own domestic industries are undermining investment in new treatments and cures for patients around the world.”
In its Feb. 8 submission, the PhRMA claimed: “Korea’s pricing policies severely devalue U.S. intellectual property and favor Korea’s own pharmaceutical industry at the expense of U.S. companies. These pricing practices are inconsistent with its commitments under the U.S.-Korea Free Trade Agreement.”
According to the Korean government Thursday, the Ministry of Health and Welfare refuted the claim in a document sent to the USTR.
In the document, the government claimed that making a numerical comparison between the drug prices of Korea and those of the U.S. was inappropriate because Korea has a universal health insurance system that is radically different from the U.S.
Observers say the Special 301 Report could be another move in the Donald Trump administration’s trade pressure on Korea, following its previous measures on steel, solar panels and washing machines.
Earlier this week, President Trump said he would impose tariffs on steel imports if that would help revive the domestic industry.
He made the remarks after the U.S. Department of Commerce earlier this month recommended tariffs on steel and aluminum imports from 12 countries including Korea.
Earlier this year, Trump signed safeguard measures against Korean firms slapping 50 percent tariffs on washers exceeding a 1.2 million quota per year.