Fight over drug protections hampers Pacific trade deal

Paul Handley
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US Trade Representative Michael Froman (C) takes a break from negotiations on the Trans-Pacific Partnership trade treaty in Atlanta, Georgia to visit the Colgate mattress factory on October 1, 2015

US Trade Representative Michael Froman (C) takes a break from negotiations on the Trans-Pacific Partnership trade treaty in Atlanta, Georgia to visit the Colgate mattress factory on October 1, 2015 (AFP Photo/Paul Handley)

Atlanta (AFP) - 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.

The arrival of senior US congressional aides at the hotel site of the Trans-Pacific Partnership in Atlanta pointed to the possibility that top trade officials from 12 countries were close to a deal.

But their presence also underscored the stakes in the ambitious US-led attempt to create a Pacific Rim free-trade zone that would comprise 40 percent of the world's economy.

Pressure was intense on negotiators, especially those from the Australia, Canada, Japan, New Zealand and the United States to not undercut important home businesses as they bargain over the remaining issues involving the auto and dairy trades and protections for the drug patents of pharmaceutical companies.

Although the auto and dairy trade issues remained table, 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.

- Pressure to finish deal -

The talks between top trade officials in an Atlanta hotel were pushed past the original Thursday deadline and were headed into Saturday.

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 to the public, 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.

That explained why aides to senior US Congressman Paul Ryan and others were in Atlanta, to ensure that the final deal is acceptable for Congress's ratification.

But similar pressure arose from Canada, where the trade treaty is an issue in the October 19 national elections.

According to reports the leader of the New Democratic Party, which until recently was leading the polls, declared that they would not feel bound to back the TPP treaty negotiated by the current Conservative government of Prime Minister Stephen Harper.

Still undecided in the talks is how much Canada's dairy market will be opened to products from Australia and New Zealand, and how much the US auto market, which currently favors parts and cars built in Canada and Mexico, is opened up to Japanese parts and autos made in other countries.

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 Brunei, Malaysia, Singapore and Vietnam.