Bridges Weekly Trade News Digest • Volume 9 • Number 30 • 14th September 2005
Andean Negotiators Call For Flexibility On AG, IPRs In FTA Talks With US
Trade negotiators from three Andean countries have called on the US to show more flexibility in their ongoing free trade agreement (FTA) negotiations, saying that its intransigence on agriculture and intellectual property rights was preventing a final agreement. In a 8 September speech at the Inter-American Dialogue, a Washington-based policy research centre, negotiators from Colombia and Peru said the US’ willingness to relax some of its demands in the two negotiating areas would determine whether they can conclude a deal by next year.
Colombia, Ecuador and Peru, along with Bolivia as an observer, started comprehensive FTA talks with the US in 2003, following Washington’s announcement that the US would not renew Andean preferential market access after the Andean Trade Preference Act’s expiration in December 2006.
Andean countries look for market access, flexibilities
Current farm trade between the US and the Andean counties amounted to USD 2.7 billion in 2003, and stands to grow significantly if tariff and non-tariff barriers are removed. The Andean countries’ requests on agriculture trade reflect both their offensive and defensive interests. On the one hand, they would like the US to open its markets to exports such as sugar, for which it maintains import quotas. On the other, they want to retain the right to use trade safeguards to afford a certain level of protection to farm products including rice, beans and corn that are crucial to livelihoods and nutrition in the region. The Andean countries argue that they need these measures because the US has not assured them that it would phase out trade-distorting subsides on these and other products. Such exceptions would be in keeping with the current mandate for WTO negotiations. The US, however, has been reluctant to discuss subsidies issues outside the multilateral context. It has also been unwilling to grant its Andean trading partners permanent exceptions on farm trade. The latter mirrors the US’ position in the recent Central American Free Trade Agreement (CAFTA), which requires all such measures to be ultimately phased out.
Andean governments negotiating the FTA are facing strong opposition from their own agricultural producers, who insist they cannot compete against farmers supported by the US treasury. Agricultural producers in Colombia have warned that if their market is fully opened to imports before the US eliminates its farm subsidies, Colombian products will be unfairly displaced from the market. This would, in turn, undermine programmes to promote alternatives to coca production, an essential part of the fight against drug production.
IP concerns focus on biodiversity, access to medicine
Two intellectual property-related issues are proving divisive in the talks: the protection of test data for pharmaceutical products, and the inclusion of a transparent disclosure requirement on the country of origin and source of any genetic recourses used or incorporated in a particular invention.
The former is central to the issue of access to medicine. ‘Test data exclusivity’ is a system used in the US and Europe to prevent access to data submitted to government sanitary authorities by companies seeking the right to market pharmaceutical products. The data is protected for time periods between five and eleven years. The US would like to see similar protection extended to such data under the terms of the Andean FTA.
Andean countries, however, were initially unconvinced of the need for such measures, arguing that data of this kind has nothing to do with innovation — the ostensible reason for the existence of intellectual property protections. They were also concerned that protecting test data might delay generic products from appearing on 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 receive marketing approval for their products. Recently, they proposed a softer formula calling for test data ‘protection’ — as opposed to ‘exclusivity.’ This would allow generic producers access to the data, so long as they provided compensation to the patent-holding companies that originally carried out the tests. This would protect the data without denying generic manufacturers access to such information, thus assuaging concerns about access to medicine. This US, however, rejected this proposal.
With regard to biodiversity concerns, Andean countries would like the FTA to include rules requiring patent applicants to reveal the country of origin and source of any genetic resources and associated traditional knowledge used in an invention, as well as provisions for compensating the titleholders of such resources and knowledge. US negotiators have indicated that they might be willing to discuss some language on biodiversity, but only if there is no disclosure requirement.
The Andean countries’ biodiversity-related demands have been echoed by a group of prominent US-based environmental organisations, including the Centre for International Environmental Law, Earthjustice, and the Sierra Club. In a July letter to US Trade Representative Rob Portman, they said that the "Andean FTA should obligate parties to require patent applicants to disclose the source and country of origin of genetic resources and traditional knowledge used in the invention, as well as evidence of prior informed consent and fair and equitable sharing of benefits." They also urged Portman to exclude plants and animals from patentability under the agreement.
Andean governments pushing for FTAs
Andean trade negotiators are facing both internal and external pressures to withdraw these minimum requests. Internal pressure comes from their own governments, which want to see quick and tangible results from the talks. Peruvian President Alejandro Toledo, for instance, has declared his intent to sign a FTA with the US even if the other Andean states do not speed up negotiations. External pressure is coming from US negotiators who are seeking commitments similar to, or deeper than, those they obtained in CAFTA.
With the final scheduled rounds of negotiations approaching, it remains to be seen if the US will choose to address some of its Andean counterparts’ concerns or if it will simply present them with a "take or leave it" deal.
The next round of talks will take place next week in Cartagena, Colombia.
The environmental groups’ letter to USTR Rob Portman is available online at http://ciel.org/Publications/AndeanLetter_July2005.pdf.
ICTSD reporting; "Peru Negociaria TLC sin Andinos," LA PRIMERA DE PERU, 13 September 2005; "TLC Andino en la recta final," BOLPRESS, 13 September 2005.