USTR Press Release, January 15th, 1997

USTR-Designate Barshefsky Announces GSP Sanctions Against Argentina for Continuing IPR Problems.

Office of the United States Trade Representative
Executive Office of the President
Washington DC 20506

Wednesday, January 15, 1997

Jay Ziegler, Kirsten Powers, Christine Wilkas 
(202) 395-3230


	United States Trade Representative-designate Charlene 
Barshefsky today announced the Clinton Administration's 
decision to withdraw 50 percent of the trade benefits 
granted to Argentina under the U.S. Generalized System of 
Preferences (GSP). Duty-free importation of products from 
Argentina will be withdrawn with respect to approximately 
$260 million of trade. This decision was the result of the 
"out-of-cycle" review under the U.S. Government's "special 
301" program, designed to advance the protection of U.S. 
intellectual property rights around the world.

	Barshefsky recently announced that she would conduct an 
out-of-cycle review to assess legislation enacted by the 
Argentine Government on December 18, 1996 and assess any 
further developments toward the protection of intellectual 
property in Argentina. The Administration has now concluded 
this review and determined that current IPR protections are 
clearly inadequate.

	In April 1996, at the time of the last annual special 
301 review, Barshefsky placed Argentina back on the 
"priority watch list" because the patent law and 
accompanying implemented decree enacted by Argentina at that 
time fell far short of adequate and effective protection and 
failed to achieve earlier Argentine Government assurances. 
This law provided that patent protection would not be 
available for pharmaceutical products until November, 2000 
and contained provisions inconsistent with the WTO's 
Agreement on Trade-Related Aspects of Intellectual Property 
Rights - known as the TRIPS Agreement.

	Following the April, 1996 decision, the Government of 
Argentina stated that it would attempt to address U.S. IPR 
concerns by enacting legislation to protect health 
registration data. Such scientific and technical data - 
which must support claims of efficacy and safety of new 
products - must be submitted by pharmaceutical innovators to 
Health Ministries to obtain approval for marketing new 
products. These data generally cost millions of dollars to 
develop. Given these costs to innovators, many countries 
prohibit competitors from relying upon such data when they 
seek Health Ministry approval for the same pharmaceutical 

	On December 18, just before the scheduled completion 
date of USTR's out-of-cycle review, the Argentine Congress 
passed legislation dealing with health registration data. 
However, this legislation does not archive its stated 
purpose. Specifically, the legislation does not prevent 
competitors from relying upon the innovator's test data when 
these rival firms seek marketing approval. On the contrary, 
the new legislation specifically permits Argentine 
competitors to rely upon such data that has been submitted 
for registration in Argentina, the United States or in 
certain other countries.

	"We have seen some encouraging efforts on the part of 
the Menem Administration to establish modern intellectual 
property protection in Argentina," said Barshefsky. 
"However, Argentina's resulting patent law and the new 
legislation designed to protect test registration data fall 
far short of this objective and fail to meet international 
standards. The result is that U.S. pharmaceutical firms will 
continue to see the fruits of their research and development 
freely copied by Argentina's pharmaceutical industry. In 
addition, Argentine pharmaceutical interests continue to 
work aggressively to frustrate our efforts to achieve 
improved intellectual property protection in other 
countries. As a result, the United States will with draw 50 
percent of the duty-free trade benefits otherwise available 
to Argentina under the U.S. GSP program."

	The administration is issuing a Federal Register Notice 
requesting public comment within 30 days outlining which 
Argentine products would be proposed for exclusion from GSP 
treatment. The Administration will publish on or about March 
1 the final list of Argentine products that will lose GSP 
duty-free treatment.