ONLINE GENERIC DRUGS PHARMACY

Under the new deal, when the U.S. enters into trade agreements with other countries, those countries must agree to: ban child labor and forced labor; guarantee rights to organized labor; and enforce existing national and international environmental law.

The pact also calls for expanded access to generic drugs for developing countries for public health emergencies. The new regulations would be applied to pending trade deals with Panama and Peru, which are involved in bilateral pacts with the U.S., as well as with South Korea and Colombia, where negotiations could prove more complicated.

Joining us to explain what is in this new agreement and its significance is Sherman Katz. He's a senior associate in the trade, equity and development project at the Carnegie Endowment for International Peace.

Sherman Katz, good to have you with us.

SHERMAN KATZ, Carnegie Endowment for International Peace: Pleasure to be here.

JUDY WOODRUFF: Just to help us all understand, put into layperson's terms what exactly has been agreed to here by the Democrats and the administration.

SHERMAN KATZ: On labor, the Democrats have been pushing hard for some time that new trade agreements, free-trade agreements, should include the right for labor to bargain collectively, to organize, and a prohibition of forced labor and child labor.

Republicans have resisted this on the ground that this is going to interfere with trade. And so Congressman Rangel, Chairman Rangel of House Ways and Means, and Secretary Paulson, Treasury, and U.S. Trade Representative Susan Schwab yesterday agreed that there is a set of principles that they can both accept to incorporate in U.S. trade agreements on that subject.

JUDY WOODRUFF: Now, those are the main features. There was also language in this agreement around pharmaceuticals, generic drugs.

SHERMAN KATZ: Correct. The problem always for policymakers on patents versus generic drugs is, how much should we reward people who've invented drugs? And how much interest do we need to give to poor people who need to have access to drugs?

And the Democrats have insisted that trade agreements should expand the opportunity for people in poor countries to have access to generic drugs earlier.

SHERMAN KATZ: Correct. Now we have provisions in trade agreements, we will have in FTAs, concerning seven extremely important international agreements on the environment -- one on endangered species, another on the ozone, another on wetlands -- in which we say, in these principles, nothing in this trade agreement that we're doing will interfere with these major agreements.

JUDY WOODRUFF: Now, assuming this agreement, which is between the leadership of the Congress and the president, the trade representative, assuming it's agreed, what is the impact going to be on the ordinary American consumer?

SHERMAN KATZ: Well, it's an interesting question. It remains to be seen whether, by giving an opportunity for workers abroad to organize, this raises their wages and, therefore, makes goods that come into the country from abroad a little less damaging or threatening to American industry.

It's been the contention of labor that, when goods come from countries that have no unions or child labor, of course it's tough for Americans to compete. And so the AFL-CIO and other unions have been saying, "We need to give these workers abroad the right to organize, because we think, a, that's going to make them more profitable and better consumers of U.S. goods and services, but, b, it also might mean that we can compete more effectively, because their wages will move up a little bit and not be so much lower than ours."