VZCZCXRO9401
PP RUEHDE RUEHDIR RUEHHT RUEHPOD RUEHROV
DE RUEHC #8022/01 1020341
ZNR UUUUU ZZH
P R 110335Z APR 08
FM SECSTATE WASHDC
TO RUEHRH/AMEMBASSY RIYADH PRIORITY 6878
INFO GULF COOPERATION COUNCIL COLLECTIVE
EUR COM POST COLLECTIVE

UNCLAS SECTION 01 OF 02 STATE 038022 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ETRD USTR SA EU SZ
SUBJECT: REQUESTING COORDINATED ACTION WITH 
EU AND SWISS EMBASSIES ON TRANSPARENCY 
IN SAUDI ARABIA'S RULE-MAKING PROCESS 
 
REF: 
¶A. 07 RIYADH 1346 
¶B. 07 RIYADH 1347 
¶C. 07 RIYADH 2139 
¶D. 07 RIYADH 2149 
 
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Summary 
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¶1.  (U)  Embassy is requested to engage with officials from the 
European Commission (EC) and the Swiss government in Riyadh to 
coordinate action to address Saudi Arabia's Ministry of Health's 
(MOH) failure to implement the Kingdom's world trade organization 
(WTO) obligations on transparency in the rule-making process with 
regard to the recent changes by the Ministry for prices of registered 
pharmaceuticals.  Despite efforts by Embassy Riyadh, the Department, 
USTR, Commerce, and the U.S. private sector since September 2007, the 
MOH has yet to provide detailed information on the criteria and 
definitions used in the recent pricing regulation that is necessary 
for interested parties to have an adequate basis to assess the draft 
regulation and develop substantive comments.  The MOH has not yet 
confirmed that it will provide a period of no less than 60 days to 
provide comments on that information as spelled out in detail in 
Saudi Arabia's WTO working party report.  USTR has discussed the 
issue in detail with EC and Swiss officials, and we have agreed to 
request that our respective officials in Riyadh coordinate action to 
address this issue.  USTR requests that Embassy share the non-paper 
on this issue with EC and Swiss officials (which has been shared with 
contacts in Brussels and Bern) and consider appropriate Embassy 
actions to ensure that Saudi Arabia implements its WTO obligations. 
End summary. 
 
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Objectives 
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¶2.  (U)  Embassy Riyadh is requested to share the non-paper in 
paragraph seven on Saudi Arabia's WTO obligations on transparency in 
the rule-making process with EC and Swiss officials and consider 
appropriate Embassy actions to ensure that Saudi Arabia implements 
its international trade obligations in this area. 
 
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Reporting deadline 
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¶3.  (U)  Embassy should report results of efforts by cable to Jason 
Buntin at USTR and NEA/ARP by April 21.  Please slug response for 
USTR (Jason Buntin and Jennifer Groves), NEA/ARP (Bagwell), and EEB 
(Scheibe). 
 
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Background 
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¶4.  (U)  The Saudi MOH initially stated its intention, in October 
2006, to reduce pharmaceutical prices in the Kingdom by 1 percent for 
each year a product has been on the market.  In September 2007, the 
MOH stated that it would issue regulations reducing prices for more 
than 6,000 medicines during the September-October period of Ramadan. 
Although delayed for several months, the price cuts took effect on 
February 2, 2008. 
 
¶5.  (U)  As a result of efforts by Embassy Riyadh, the department, 
USTR, Commerce, and the U.S. private sector, the MOH has via its 
website notified the public of the opportunity for interested parties 
to send suggestions on the changes directly to the ministry. 
However, the MOH has yet to provide detailed information on the 
criteria and definitions used in this pricing regulation that is 
necessary for interested parties to have an adequate basis to assess 
the draft regulation and develop substantive comments.  The MOH has 
also not confirmed that it will provide a period of no less than 60 
days to receive comments on that information as spelled out in detail 
in paragraph 36 of Saudi Arabia's WTO working party report in the 
specific context of pharmaceutical pricing and more generally in 
paragraph 305. 
 
¶6.  (U)  USTR has discussed the issue in detail with EC and Swiss 
officials and agreed to request that our respective representatives 
in Riyadh coordinate action to address this issue.  USTR has 
developed the attached non-paper to share with EC and Swiss officials 
and consider appropriate Embassy actions, possibly similar to the 
joint meeting that the EC, Swiss, and Belgian ambassadors held with 
the minister of health in September 2007, to ensure that Saudi Arabia 
 
STATE 00038022  002 OF 002 
 
 
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Non-paper 
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¶7.  (U)  Begin text: 
 
Saudi Arabia's WTO working party report (available at 
http://www.WTO.org) includes commitments by the Kingdom regarding 
transparency in the rule-making process.  Paragraphs 301-305 of the 
report include general information and commitments by Saudi Arabia on 
implementation of the transparency requirements prescribed in the WTO 
agreements.  In particular, paragraph 305 includes a commitment by 
Saudi Arabia to publish promptly "all laws, regulations, decrees, 
judicial decisions and administrative rulings of general application 
pertaining to or affecting customs issues, trade in goods, services, 
intellectual property, and the control of foreign exchange" in the 
umm al-Qura in a manner that fulfils WTO requirements and a 
commitment that "no such law, regulation or other normative act or 
measure would become effective or be enforced prior to such 
publication."  Saudi Arabia also committed to "establish or designate 
an official website (and possibly a supplemental official journal or 
an expanded umm al-Qura), updated on a regular basis and readily 
available to WTO members, individuals, associations and enterprises, 
dedicated to the publication of all regulations, decisions, orders, 
administrative rulings of general application, and other measures 
pertaining to or affecting trade in goods, services and trips prior 
to enactment."  The commitment noted that "the publication of such 
regulations and other measures would include, as appropriate, the 
names of the authorities (including contact points) responsible for 
implementing a particular measure and the effective date of the 
measure."  Saudi Arabia also committed to "provide a reasonable 
period, i.e., no less than 60 days, for members, individuals, 
associations and enterprises to provide comments to the appropriate 
authorities before such measures were adopted, except for those 
regulations and other measures involving national emergency or 
security, or for which the publication would impede law enforcement." 
 
Paragraph 36 of the working party report includes specific 
information and commitments by Saudi Arabia regarding pharmaceutical 
pricing including a commitment that "the ministry of health and other 
agencies participating in the price control and registration process 
would comply with Saudi Arabia's commitments on transparency and 
would provide adequate opportunities to interested parties to become 
familiar with and provide comments on draft proposals." 
 
Saudi Arabia's ministry of health initially stated its intention in 
October 2006 to reduce prices of pharmaceutical products in the 
private market in the Kingdom, and issued similar announcements until 
the price reductions took effect on February 2, 2008.  However, 
contrary to Saudi Arabia's WTO commitments noted above, none of these 
announcements provided the text of the government measure, including 
specific criteria and definitions, implementing these changes, or 
provided information on a process for interested parties to submit 
comments on the changes. 
 
The ministry of health's website now notifies the public of an 
opportunity for interested parties to submit suggestions on the price 
changes directly to the ministry.  However, the ministry has yet to 
provide detailed information on the criteria and definitions used as 
a basis for the changes that would be necessary for interested 
parties to have an adequate basis to assess the draft regulation and 
develop substantive comments.  The MOH has also not yet confirmed 
that it will provide a period of no less than 60 days to provide 
comments on that information. 
 
End text. 
 
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Point of contact 
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¶8.  (U)  Please contact Jason Buntin at (202) 395-9564 or 
jason_buntin@USTR.eop.gov for any necessary further background 
information or assistance to meet these objectives. 
RICE