Fight over drug protections hampers Pacific trade deal

Negotiations on the huge Pacific trade deal spilled into overtime on Friday with negotiators mainly stuck on how much patent protection to give biologic drugs.

Although talks on the Trans-Pacific Partnership still needed to resolve other issues on auto and dairy trades, officials involved said the main barrier to a final deal is the length of intellectual property (IP) protection for biologics, a promising class of treatments derived from living materials.

The United States, the main driver of the 12-nation TPP free-trade pact, is seeking longer protections than the five years common in many countries.

In the US, pharmaceutical companies get 12 years of IP protection before rivals can produce "biosimilar" copycat drugs that sell more cheaply. But in most countries, the US protections for drug developers are seen as far too long, and costly, for health care systems.

The issue has raised objections from civil society groups and government health programs across many of the countries involved in the negotiations.

Rather than a problem of just cutting tariff or other trade barriers, lengthening protections would in many places require changing well-established national laws and IP protection policies.

According to one source informed on the progress of the talks, strong resistance to Washington's stance was coming from Australia, Chile and Peru.
The talks between top trade officials in an Atlanta hotel were pushed past the original Thursday deadline and by Friday afternoon expectations were that they would extend into the weekend.

In one of the few public comments from negotiators, US Trade Representative Michael Froman, the host and one of the key driving forces behind the TPP talks, said late Thursday that "everyone is working hard to find pragmatic solutions to the difficult outstanding issues."

An official from Canada, which together with Mexico is most concerned with how much the North American auto market will be opened to cars and parts from outside the region under TPP, denied reports that the sensitive issue had been settled.

"Negotiations are continuing on a range of issues, including autos and auto parts," the official said, insisting on anonymity.

"We are making progress towards securing an outcome that protects and creates jobs in our auto sector, and every other sector of the Canadian economy. Nonetheless, more work remains."

Also still undecided is the opening of Canada's and other markets to more dairy products like cheese and milk powders from Australia and New Zealand.

Trade ministers had entered this week's TPP negotiations under pressure to strike a final deal, after their talks in Hawaii two months ago failed. They have already addressed many other issues, including some other industrial and agricultural trade areas, competition with state enterprises, digital economy protections, and investment-dispute mechanisms.

But the details of many of those specific TPP chapters remain secret, with the idea that negotiators will produce a complete, unalterable final document for their governments or legislatures to ratify on an up-or-down basis, with no room left to negotiate.

The TPP would be the world's largest free-trade area, comprising 40 percent of the world economy. The 12 countries in the talks also include Japan, Singapore, Malaysia, Vietnam and Brunei.

Many expect that if a treaty is negotiated and ratified, South Korea and others could quickly join, locking into place a strong set of rules for trade and investment in the Asia-Pacific region.

Since initiating the talks in 2008, the United States has been hoping to establish standards on free trade and intellectual property protection that China would eventually have to heed.

China, however, has already begun trying to set up its own Asia trade agreement, which analysts worry could take concrete shape if TPP talks fail.

Source: AFP