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Cablegate: Trade Official Comments On Pharmaceuticals,

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 ANKARA 002170

SIPDIS

DEPT FOR EB/TPP/MTA/IPE - JURBAN, EUR/SE, EB/TPP/ABT
DEPT PASS USTR FOR LERRION/JCHOE-GROVES
DEPT PASS LIBRARY OF CONGRESS FOR STEPP
DEPT PASS USPTO FOR JURBAN AND EWU
USDOC FOR ITA/MAC/DDEFALCO AND JBOGER

SENSITIVE

E.O. 12958: N/A
TAGS: ETRD KIPR TU
SUBJECT: TRADE OFFICIAL COMMENTS ON PHARMACEUTICALS,
GSP, AND THE BILATERAL TRADE RELATIONSHIP

Ref: State 66948

Summary
-------

1. (SBU) Econoff met with Foreign Trade
Undersecretariat (FTU) Deputy Director General for
Agreements Osman Bekaroglu to deliver reftel demarche
on anti-schizophrenia drug Zyprexa. Bekaroglu said
that the Health Ministry was well aware of the
sensitivities involved in the Zyprexa issue. With
regard to the possible PhRMA petition to restrict GSP
benefits for Turkey, Bekaroglu responded that the GSP
program was of limited benefit to Turkey. However,
Bekaroglu told us that FTU planned to give higher
priority to trade with the United States, and would
announce a promotion strategy later this year. End
Summary.

Pharmaceuticals and Special 301
-------------------------------

2. (SBU) Meeting with Osman Bekaroglu, FTU Deputy
Director General for Agreements, on April 15, Econoff
made reftel points and also provided a copy of Senator
Lugar's April 13 letter to FM Gul on Zyprexa. Note:
Embassy has also faxed copies of reftel talking points
to the Health, Foreign Affairs, and Justice Ministries,
as well as the Turkish Patent Institute. End Note.
Econoff stressed that U.S. drug companies may petition
the USG to deny or restrict Generalized System of
Preferences (GSP) benefits for Turkey as a result of
weaknesses in intellectual property protection. He
also noted that U.S. pharmaceutical companies in Turkey
recently reported that the Health Ministry was planning
to strengthen protection afforded by the January 2005
data exclusivity regulation, possibly by affording
protection to off-patent drugs. Econoff pointed out
that Washington would announce the results of the 2005
review by early May, and suggested that it would be to
Turkey's benefit to implement any positive steps under
consideration within this timeframe, if possible.

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3. (U) Bekaroglu responded that FTU was coordinating a
multi-agency response to U.S. industries' Special 301
submissions, and hoped to transmit this to us next
week. He related that the Health Ministry's maintained
that the data exclusivity regulation complies fully
with the terms of the EU Customs Union Agreement, and
said that the Ministry was well aware of the
sensitivity of the Zyprexa issue. Econoff responded
that the EC's concerns about the data exclusivity
regulation are similar to our own, particularly with
respect to lack of protection for non-patented drugs
and for molecules registered before 2005 for which a
generic application had been filed.

4. (U) Note: Embassy faxed the Health Ministry's
written comments to EB/IPE. In addition to providing
its rationale on the data exclusivity regulation, the
Ministry contradicts PhRMA's assertion concerning a ten
percent price preference for drugs using domestic raw
materials; this preference was cancelled in 2004. End
Note.

5. (SBU) Commenting on a possible PhRMA GSP petition,
Bekaroglu opined that the program was of limited
benefit to Turkey. Referring to a recent study by FTU,
he stated that some 30 percent of Turkish exporters
were not aware of the program and did not pursue its
benefits. Furthermore, despite the high value of
Turkish exports under GSP, the actual benefit in waived
tariffs was "only" about USD 50 million annually, with
the jewelry and travertine industries as the leading
beneficiaries.

New U.S. Trade Strategy
-----------------------

6. (U) Bekaroglu told Econoff that FTU was crafting a
new strategy to boost trade with the United States
beginning in 2006. The strategy will target five
states (New York, Texas, California, Illinois and
Florida) and would involve posting five new Turkish
commercial officers to the U.S. Bekaroglu said that
Minister Tuzmen or Undersecretary Kayalar would host a
press conference, probably in the fall of 2005, to
announce the strategy.

7. (U) Econoff reiterated USG interest in holding a
meeting of the Trade and Investment Framework Agreement
(TIFA) Council. Bekaroglu responded that he was
working with the FTU Undersecretary's Office to
identify possible TIFA dates and would send us a
proposal.

Comment
-------

8. (SBU) Bekaroglu remarks on GSP are surprising, given
longstanding Turkish interest in expanding the scope of
its benefits, their efforts to educate Turkish
companies about the program, and the trade
bureaucracy's strategic priority of boosting bilateral
trade. However, his comments highlight the apparent
disparity in political and economic weight between the
industries that would be hurt by loss of GSP (jewelry,
building stone and a host of smaller exporters) and the
one that has the most to lose as a consequence of
stronger IP rights (the huge generic drug industry).
EDELMAN

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