S.
A possible blockade of both land and air routes could damage the industry," says Hikma Pharmaceuticals Chairman Mazen Darwazeh. Of course, this has come to pass.
A cutting off of passageways to Jordan would lead to a delay in the import of raw materials needed to manufacture the drugs.
Consequently, shipments to be delivered to international markets would also be delayed.
A majority of the Jordan's 17 pharmaceutical companies conduct trade with sanctions-struck Iraq.
In the early 1990s, only six companies operated in Jordan exporting around $50 million worth of their products to Iraq. At the time Jordanian pharmaceutical firms controlled the lion's share of the medicines trade to Iraq, it's neighbor.
Last year, of the total $200 million in Jordanian pharmaceutical exports, only $20 million, or 10 per cent, were exported to Iraq.
This is because of the Iraq war that the U.S. started, with which Jordan had no dealings at all.
At the same time, pharmaceuticals is a major industry for Jordan, and a great area for the developing country to build its exports:
Pharmaceuticals are a major foreign currency earner. Last year, at a total of JD142 million, pharmaceuticals ranked second on Jordan's list of exports after clothing. Some 60 per cent of production is exported while the remainder is consumed locally.
But already it is at a disadvantage because a GATT free trade trading partner is sabotaging its efforts to build its pharmaceuticals exports through a war with its neighbor.
As a backdrop, is it fair, then, for there to be no tariffs, or most-favored nation trading, on pharmaceuticals between U.S. And Jordan?
Which country does it help, or does it help both?
From the political / global perspective, the free trade in like product pharmaceuticals harms Jordan.
First, without dealing with the Iraq war,
Jordan has a fledgling industry, which is large by its own standards, but absolutely negligible compared to the U.S. pharmaceutical standards both internationally and domestically
So if Jordan is to produce a like product to a U.S. product (say, Advil), it's start up costs are significantly higher
Also, it'll have to spend the marketing dollars to get its product (say, J-Advil) known abroad
Already, without tariffs, Jordan is suffering
Then there is the idea that the U.S. started a war with Iraq that will further compromise Jordan's power to be competitive:
Jordan loses its major source of pharmaceutical revenue in Iraq, so it has that much less money to reinvest in R&D to make its J-Advil competitive with Advil, and then market the product abroad.
Without tariffs to protect its fledgling industry, an industry that has been veritably attacked by its major competitor, the U.S., it has no hopes of selling J-Advil in the U.S.
Of course, under GATT free trade, if it were to impose tariffs on Advil, U.S. would reciprocate with tariffs on J-Advil;
So the advantage would be lost
There are the like products issues too
Is it even possible, or is it advisable, for Advil and J-Advil to construed as like products under GATT?
First, the procedure.
Physical characteristics first.
Here, highly irrelevant. A pharmaceutical is rarely purchased based on its appearance, save perhaps the difference between capsules, tablets and syrups to be consumed.
But then again, maybe it is an issue:
If J-Advil is a tablet, and Advil is a capsule, are they like products?
Depending on how the WTO / GATT dispute resolution panels rule, they may or may not be, depending on the next factor:
List of criteria
End uses in a given market
Consumer tastes and habit
The product's properties
Nature
Qualities
Most recently, the dominant criterion: like products test: commercial substitutability.
First, end uses in a given market:
Both Advil and J-Advil would be used, presumably, exactly for the same purposes in the U.S. And in Jordan
Consumer tastes and habit: This question links closely with our earlier discussion of tablet/capsule/syrup. How is the pharmaceutical from Jordan presented? Will that change consumption and the nature of what type of product it is in the American marketplace, due to particularities of American consumers' tastes and habits?
The product's...
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