PHA-Exchange> Tariffs on medicine

[Claudio]

[...an act of wise statesmanship...??]
Claudio

> Tariffs on medicine

> A Trade Opportunity for China and America
> 
> By Roger Bate
> Co-Authored by Jim Driscoll
> http://www.tcsdaily.com/article.aspx?id=041406E
> 
> Bush administration Commerce Secretary Carlos Gutierrez has
> warned that the US is running out of patience waiting for China
> to take effective steps to do its part to reduce the ballooning
> US$ 200+ billion trade deficit with China. Recently, the US,
> Switzerland, and Singapore proposed a small but highly construc-
> tive remedy China could implement immediately: eliminate tariffs
> on medicines and medical products. Chinese President Hu Jintao's
> visit to Washington DC next week affords President Bush a signal
> opportunity to call upon China to take this urgently needed ac-
> tion.
> 
> The US, the EU, Japan, Canada and other developed countries
> eliminated these tariff impediments to healthcare years ago.
> With their large trade surpluses China and other rapidly devel-
> oping Asian states can easily afford elimination; with their
> huge unmet healthcare needs maintaining medical tariffs is
> folly.
> 
> Provision of healthcare in China and Asia has failed to keep
> pace with economic growth and environmental strain. SARS, bur-
> geoning HIV rates, and the threat of avian flu make the region's
> relatively poor healthcare painfully evident and urgent. Despite
> growing foreign exchange surpluses, the Asian countries with the
> largest HIV epidemics, still erect high tariff barriers to AIDS
> drugs, as well as to other medications and medical products --
> India (16 percent), China ( 6.5 percent) and Thailand (11 per-
> cent). Then they pile VAT and local sales taxes on top their
> tariffs, (India 5 percent, China 17 percent, and Thailand 7 per-
> cent).
> 
> Compounding the damage, collection of tariffs creates bureau-
> cratic obstacles to treatment access and provides ample opportu-
> nities for corruption at ports and at other borders where tar-
> iffs may be collected. Health charities privately claim that
> their donated supplies often sit on the docks of China and other
> Asian countries spoiling while kickbacks of as little as $20 are
> demanded. Removal of tariffs will not stop corruption but should
> make it less routine and harder to sustain.
> 
> To build hospitals, medical schools, clinics and health ser-
> vices, China and the rest of Asia need to import advanced US
> medical products and technology. Tariffs delay improvements in
> Asia's healthcare infrastructure and increase their cost.
> China's medical tariffs can fund less than one tenth of one per-
> cent of their national healthcare budget; yet they inflate the
> cost of many medical products by more than ten percent.
> 
> Medical tariffs are regressive, detrimental, and obsolete. They
> hurt the poor most, denying them access to medications essential
> to life, health, and productivity. For rapidly developing coun-
> tries with balance of payments surpluses, tariff barriers to
> healthcare access are protectionism at its inexcusable worst.
> Such barriers foster global trade imbalances and damage public
> health solely to benefit selfish special interests. China and
> other Asian countries should throw their doors wide open to the
> best available medical products and technology by joining the
> US, EU, and Japan with a zero-tariffs policy.
> 
> For President Hu Jintao abolishing tariffs on medical products
> would be an act of wise statesmanship with great rewards. It
> would help remedy trade imbalances with the US, and simultane-
> ously improve healthcare for the Chinese people. Hu's decisive
> action would pressure other rapidly developing countries, like
> India, Thailand, Mexico, Russia, and Brazil, to follow China's
> lead.
> 
> Globalization provides great economic benefits but to similarly
> improve world health and protection against infectious disease,
> we need global trade policies that give priority to healthcare
> needs. America and China have a unique opportunity to help cor-
> rect their trade imbalances and to lead all nations toward bet-
> ter healthcare by championing zero tariffs on medicines and
> medical products. If Presidents Bush and Hu Jintao can together
> seize this opportunity, all humanity will benefit from their
> statesmanship.
> 
> *James Driscoll, Ph.D., a long time AIDS activist, is an advisor
> to the China Foundation, and has served as a Bush appointee to
> the Presidential Advisory Council on HIV-AIDS. Roger Bate PhD,
> is a resident fellow of the American Enterprise Institute, a Di-
> rector of health advocacy group Africa Fighting Malaria and lead
> author of the paper 'Still Taxed To Death'
> http://www.aei-brookings.org/publications/abstract.php?pid=930
> published by the AEI-Brookings Joint Center.
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