SAVICKAS: Pelosi’s Meddling Could Doom US-Mexico-Canada Trade Agreement

If there is one thing the country has learned since the inauguration of Donald Trump as president, it’s that his political opponents bristle unconditionally at all of his proposals. This is especially true of the president’s self-proclaimed “America first” agenda. This is usually the result of knee-jerk reactions to oppose whatever comes from the president’s mouth or a genuine astoundment that the American president might put his citizens’ interests above those of the rest of the world.

This trend has once again reared its ugly head when it comes to the United States-Mexico-Canada Agreement (USMCA) on free trade. To be sure, the agreement had many flaws is deserving of a world of intense scrutiny by lawmakers. The opportunity for such scrutiny has been before congressional leaders for months and yet nothing has come to fruition. The deal has been weighed down by congressional inaction.

Now, at the eleventh hour, House Speaker Nancy Pelosi (D-Calif.) is trying to tinker with a provision of the agreement relating to the intellectual property rights of biologic drugs. Pelosi had all kinds of time to do said tinkering. This is a shameless play to obstruct the passage of the USMCA without appearing like this is nakedly political.

The provision in question grants 10-year biologic exclusivity across North America. This means that brand-name patents on biologics will be honored for 10 years in the three nations in the agreement. During this time, no competitors or generic counterparts may come to market. This provision was seen as an important win for American patients, as well as the manufacturers of innovative cures.

Currently, this 10-year exclusivity would be longer than the existing law in Mexico and Canada. The U.S. uses a 12-year exclusivity period under current law. Though viewed as a compromise by some, this 10-year period of exclusivity is long enough — especially when compared to existing Mexican and Canadian laws — that it would harm the investment incentive for generic competitors, and potentially inhibit their ability to market to consumers.

This is an argument made by many free market organizations and consumer groups during the debate on USMCA. It is also one that Pelosi and other congressional Democrats should have been making for a long time. Instead of being serious about coming to a final version of the agreement that parties on all sides could get on board with, they delayed until now, when any sticking points could potentially sink the whole agreement.

The USMCA has now been ratified in Mexico and an implementation bill has been introduced in Canada. Now that we’re here, what is important is that a deal get passed with a uniform biologics exclusivity period, regardless of some misgivings about length. Under the current framework, Mexican and Canadian patients get access to lower-cost medication before US patients. This means Americans have to bear a disproportionate burden of the research and development costs of these biologics. Harmonizing the exclusivity will level the playing field across these nations, something that has been lacking for years.

Pharmaceutical companies spend large sums of money to research and develop new, innovative cures. Industry estimates often hover around 2.6 billion dollars, according to a study done by the Tufts Center for the Study of Drug Development. Even low-end estimates that adjust for methodology wind up around 90 million dollars, still a hefty amount. When companies have longer market exclusivity in the U.S. than they do abroad, Americans are the ones who have to pay those costs to make that research and development worthwhile.

Despite the flaws of USMCA, American patients and caregivers should not be left holding the bill for patients in Mexico, Canada, or any other nation for that matter. That is why the uniform exclusivity — of whatever length — is an important provision and why it fits nicely within President Trump’s “America First” mantra. Last minute alterations of the sort proposed by Pelosi risks the deal’s ratification and the continuation of the status quo that disadvantages Americans.

Another big risk with such a maneuver is the potential to leave North America without a free trade agreement altogether. President Trump has threatened to pull the U.S. out of the North American Free Trade Agreement (NAFTA). There are questions about whether or not he has the constitutional authority to do so. However, if he does, that would create the absence of a trade agreement with two of our biggest trade partners and would only increase the market uncertainty surrounding America’s trade policies. That would have devastating effects on our economy.

The time has come for Pelosi and Congress to stop playing games with our country’s economic future. There are millions of Americans across the nation depending on the outcome of the debate on USMCA. The deal has been on the table for months. The American people should not tolerate any more stall tactics from any policymaker, let alone the speaker of the House.

Daniel Savickas is the regulatory policy manager for FreedomWorks, a nationwide grassroots organization dedicated to lower taxes, smaller government, individual liberty and the American rule of law.