The European Union's member states have adopted an international deal to remove customs duties on new pharmaceuticals, the European Commission said yesterday.

Under the third revision of Pharma-GATT agreement approved, there will be no customs duties levied on some new pharmaceuticals and chemical intermediates used in their production between the EUand two other joining countries, the United States and Switzerland.

"It is a show of confidence in the global competitiveness of the EU pharmaceutical industry, and a signal of our commitment to ensuring that the modern trading environment is in step with innovation," said the EU Trade Commissioner Peter Mandelson.

A 1994 WTO deal has already established a free trade mechanism for pharmaceuticals and chemical intermediates, but increasing new products thanks to scientific development were not covered.

The European chemical industry council, CEFIC, estimated the agreement could save 230 million euros in 2007 for EU pharmaceutical companies.

Japan is expected to join the agreement later this year.