[Ip-health] Bridges: IP abd Agriculture Hobble Andea-US Free Trade Talks

[Mike Palmedo]

http://www.ictsd.org/weekly/05-11-30/story7.htm

AG, IP HOBBLE ANDEAN-US FREE TRADE TALKS

Bridges Weekly Trade News Digest
November 30, 2005

Nine days of free trade negotiations between the US and Colombia, Peru
and Ecuador have again ended without an agreement. This round -- the
thirteenth -- had been expected to be the last in the Andean-US free
trade agreement (FTA) talks, which started in 2004. Nevertheless,
disagreements over farm trade and intellectual property rights (IPRs)
prevented the parties from striking a deal, even after extending the
Washington meetings up to four days beyond the originally scheduled
14-18 November dates.

The Andean negotiators have largely attributed the impasse to the US'
lack of flexibility on agriculture, IPRs, and, to a lesser degree,
sanitary and phytosanitary (SPS) measures, issues that have been
sticking points for much of the negotiations (see BRIDGES Weekly, 14
September 2005). Ecuador strongly criticised the US for inflexibility on
agriculture and IPRs after the recent meetings.

Agriculture has always been isolated from the broader Andean-US FTA
talks, with negotiations taking place on separate bilateral tracks
between the US and each of the three Andean Community (CAN) countries.
It now appears that all remaining unresolved issues in the joint talks
are coming up in the bilateral discussions as well.

Among the three Andean counties, the US' bilateral talks with Peru have
reportedly showing the most progress. However, even these talks broke
down during the recent meetings, with Peruvian Foreign Trade and Tourism
Minister Alfredo Ferrero saying that "We are not yet in condition to
reach a balanced agreement comprising Peru's interest."

Colombia, Ecuador and Peru are members of the Andean Community, a South
American regional alliance. The current FTA negotiations began in May
2004 after the US announced that it would not renew the Andean Trade
Preferences and Drug Eradication Act, a trade preference scheme for
Bolivia, Colombia, Ecuador and Peru scheduled to expire in December 2006.

Data exclusivity at centre of IPRs, Ecuador warns Peru against concessions

The length of the pharmaceutical "data exclusivity" period has been one
of the key sticking points in the talks. This refers to a protection
period for the clinical test data that brand name pharmaceutical
companies submit to government sanitary authorities when seeking the
right to put a new drug on the market. This could potentially delay the
entry of generic versions into the market, since would-be generic
manufacturers would have to either wait for the end of the exclusivity
period or run their own clinical tests in order to secure marketing
approval for their products.

Peru and Colombia are said to have accepted the five-year period that
the US was seeking. However, Peru is seeking the option of waiving this
condition in the event of a national emergency. This issue went
unresolved during its recent bilateral talks with the US. It is not
clear whether Colombia is seeking a similar waiver.

Ecuador has been holding out for a shorter, three-year period for data
protection, in addition to a national emergency waiver. It also has
concerns with regard to the coverage and effects of patents. Ecuadorian
trade negotiators insist that they are unwilling to accept hasty
concessions simply in order to strike a deal. One suggested that it
would block the negotiations indefinitely if Peru agreed to IP
concessions that it found unacceptable.

Ecuador's comparatively wary approach to the negotiations have some
trade analysts suggesting that Peru and possibly Colombia would abandon
the joint discussions altogether in favour of separate bilateral
agreements with the US.

Market access key to agriculture negotiations

Agriculture has been another major obstacle to agreement. All parties
are pushing for greater market access; the Andean countries have been
arguing that the US' position does not offer them enough benefits. Many
of the differences centre on issues related to each country's
'sensitive' products, for which they are reluctant to expand market access.

Colombia and the US were unable to agree on how to treat several
products. Colombia wants greater market access for its sugar exports
than the US has been willing to give. The US is in turn demanding market
access for pork, rice and beef exports, which Colombia deems
'sensitive.' Colombia did, however, agree to accept the eventual
elimination of tariffs on 'sensitive' products, so long as suitable
safeguard measures are an integral part of the deal. It is, however,
still seeking a measure of protection to some 'very sensitive' products
after the agreement is implemented. The two countries also differed on
sanitary and phytosanitary measures facing Colombian exports, as well as
rules of origin requirements for tobacco.

Agricultural negotiations between the US and Ecuador have been primarily
stuck on issues related to rice, corn, dairy products and flowers, and
rules of origin issues for tuna.

The US dismissed a last minute offer by Ecuador to expand tariff rate
quotas and reduced phase-out times as insignificant.

Inflexibility linked to fears over Congressional approval for FTA

Throughout the negotiations, the Bush Administration has warned that
Congress would be unlikely to support a deal that did not match the
level of market access for sensitive products in the US' recent FTA with
Central American countries. Congress approved that agreement by two
votes (see BRIDGES Weekly, 3 August 2005); some question whether Bush,
whose recent poll ratings have been falling, would be able to influence
Congress enough to secure support for an eventual Andean deal.

Joint talks between the four countries are scheduled to take place on 5
December.