Tuesday, August 09, 2005

Out and About

I have spent the last several days engaged in American Bar Association activities. Up until yesterday, I had been the Co-Chair of the Customs Law Committee in the Section of International Law. I have held that position for about three years and am now going to move to another role within the Section. I still do not know exactly what that role will be. But, in a lot of ways, the ABA is a great organization and I am happy to do my part.

Having the meeting in my home town of Chicago made it even better. I spent a fair amount of time giving advice on what museums to visit (the Art Institute), where to get good pizza, seafood, and the best Mexican food.

I was directly involved in two programs.

The Customs Law Committee sponsored a meeting on the issues relating to the re-importation of prescription drugs. This turned out to be a really good discussion. The panel consisted of an M.D. from the Board of AARP, a Canadian consultant to the pharmaceutical industry, a former FDA official now in private practice, the head of the State of Illinois prescription drug program, and the guy from Customs & Border Protection responsible for cargo release. The panel was very balanced, and, take it from me, this group had a variety of opinions.

There was of course no resolution. But it is clear that basic economics are at work here. The U.S. has a relatively free drug market. Many developed countries have price controls on drugs. This situation naturally creates an incentive to import or re-import drugs. A very perceptive person in the audience described this as "not re-importing drugs, but importing price controls."

One thing to keep in mind about this issue: People are pretty loose with the difference between "import" and "re-import." "Re-import" makes us all feel good because the drug was made here and we trust the system. But, a lot of the drugs coming in via the internet and mail are not re-imports at all. They are drugs produced outside regulatory oversight system (whether in Canada or elsewhere). That can be dangerous and is why state and federal officials looking into re-importing drugs are careful to limit the acceptable sources to approved pharmacies.

It is a very complicated issue that cuts across customs law, public health policy, and economics. Very interesting.

My other contribution was as a panelist speaking about the future of free-trade agreements. The panel consisted of a lawyer from Argentina, another from Brazil, an auto company compliance manager, a professor and me. There was a lot of discussion about the almost dead FTAA and the newly born CAFTA.

My role was two-fold. First, I talked about whether there is any real commercial utility to some of the new agreements. I can't recall a client every pounding the desk telling me that the U.S. needs to open the markets in Morocco or that we need to make kumquats from Bahrain duty-free in the U.S. Looking at the commercial value of these agreements (e.g., CAFTA, Jordan, Panama, Thailand, the Andean nations, etc.), versus the administrative hassles, costs and potential liabilities makes me wonder who is actually lobbying for them. Seems to me it is probably Donald Rumsfeld.

The second point on my agenda was to discuss the relationship between regional trade agreements and the WTO. As far as I can tell, the relationship is that the regional trade agreements undermine the WTO. According to a recent WTO consultative body report, these agreements are one of the biggest threats to the future of the WTO. As it stands right now, WTO members pledge to give each other Most Favored Nation treatment. The exception to that is where there is a regional trade agreement. Well, now everyone is doing regional trade and just being in the WTO leaves you with Least Favored Nation status. Seems to marginalize the WTO. That is an example of what lawyers call the exception swallowing the rule.

So, that was my Friday through Sunday. All empty space was filled with fancy receptions, drinks with friends from around the world and big talk about big ideas.

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