South Korea’s long-delayed Free Trade Agreement (FTA) with the US has now been approved and, in a separate announcement, Korea says it plans to account for 22% of global biosimilar drug sales by 2020.
The US/Korea FTA, agreed last Friday (December 3) in Washington, will remove tariffs on 95% of goods traded between the two countries within five years, a move which the US International Trade Commission estimates will increase US exports to Korea by up to $11 billion a year. The initial FTA was signed in June 2007 but its ratification has been deadlocked until now due to concerns relating to automobiles, beef and agriculture.
The Pharmaceutical Research and Manufacturers of America (PhRMA) said that the FTA’s provisions, particularly those relating to transparency and intellectual property (IP), represent “a 21st standard that should be a model for other agreements,” and urged Congress to ratify the deal “in the next year.”
PhRMA has long viewed the FTA as “a terrific opportunity for Korean patients to access biopharmaceutical medicines produced in the United States,” said the industry group’s chief executive, John Castellani.
“Korea is an important market for the US research-based pharmaceutical companies, a country where we currently enjoy a trade surplus. This agreement will contribute directly to increased US exports and the expansion of highly-skilled well-paying jobs” in the US, he added.
The deal is a landmark for both Korea and the US; for the latter it is its largest trade deal since the North American Free Trade Agreement (NAFTA) with Canada and Mexico in 1995, while Korea becomes the first country in the world to have FTAs with the US, the European Union (EU), India and the Association of Southeast Asian Nations (ASEAN).
Meantime, the Korean government has announced a new support programme for the domestic biopharmaceutical industry, aiming for it to account for 22% of the world biosimilar drugs market by 2020.
The government has named the sector as one of Korea’s core green industries, and is aiming for the development of at least five globally-competitive manufacturers of biosimilars, with the creation of 120,000 new jobs and contributions of $2 billion to Korea’s Gross Domestic Product (GDP) and $1 billion to its exports, says the Ministry of Knowledge Economy.
Korea’s local generic drug industry had “failed to advance to the global market because it just settled for the domestic market,” said Choi Kyung-hwan, the Minister of Knowledge Economy, adding: “we need to make this an opportunity for Korea to become a leader in the global bio and pharmaceutical industry.”
– In a report published last week, Business Monitor International (BMI) forecast that South Korea’s pharmaceutical market will grow 7.1% a year on average to a value of $19.33 billion in 2014, reaching $26.50 billion by 2019.
