IP Critical As Rocky US-Andean Trade Talks Resume

By Martin Vaughan for Intellectual Property Watch

Washington, DC—With negotiators set to resume work this week, Colombia, Peru and Ecuador are resisting demands by the United States for patent protections that go beyond those enshrined in international trade law in talks toward a U.S.-Andean free trade agreement continuing this fall.

At the international level, trade-related patent protections are covered in the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Additional protections for pharmaceutical patents sought by the US have arisen as a key stumbling block in negotiations, leading last month to the public withdrawal from the talks of three officials from Colombia’s Ministry of Health.

US and Andean negotiators are meeting this week in Washington to try to make progress on selected chapters, including on intellectual property. Negotiators had hoped to conclude talks by the end of this year, but optimism has faded rapidly since the last round of talks in Cartagena, Colombia wrapped up in September. While negotiators continue to work on individual chapters, the next formal round for the talks has not been scheduled.

In a late September letter to Colombian Health Minister Diego Palacio Betancourt, the three officials cited “inflexible” positions taken by the United States negotiating team in talks on the IP chapter. Also, according to the letter, their withdrawal was prompted by statements to the press by lead Colombian negotiator Hernando Jose Gomez that final decisions in the negotiations would be made at the political level, rather than on the advice of technical advisers. The letter stressed that acceding to intellectual property provisions along the lines of the existing US-Chile or US-Central American trade pacts would not be in Colombia’s best interest.

A Colombian official said that despite the withdrawal of key officials from trade negotiations – those officials have not stepped down from their posts in the Ministry of Health – the health ministry remains part of the Colombian negotiating team.

Data Protection A Sticking Point

The dispute over intellectual property provisions is far from the only reason the talks have bogged down. US officials say Colombia’s reluctance to make concessions on lowering agricultural tariffs has frustrated progress, and have raised the possibility of moving ahead with a bilateral with Peru if Colombia and Ecuador do not come forward with more market-opening concessions.

As in the Central American Free Trade Agreement (CAFTA), approved by the US Congress in July, US proposals to require five years of protection for test data on patented drugs and ten years for agrochemicals have met resistance and have become a lightning rod for criticism. Some public health advocates maintain such requirements undermine access to affordable generic drugs in countries entering into agreements with the US.

US officials argue that stronger protections for data will encourage research and development of innovative drugs in those countries. CAFTA countries eventually did sign off on the five and 10-year data protection periods, as had Australia, Morocco and other US free trade agreement partners.

Colombia already provides five years of data exclusivity for drugs, but Peru and Ecuador’s laws are weaker on data protection, trade officials said.

Members of the Ways and Means Committee of the US House of Representatives, who visited the Andean region in an August trade delegation, called the lack of statutory patent protection and enforcement of existing laws in Peru “a major concern.” According to the written report from the delegation, Peruvian resistance to US patent proposals was fueled by two high-profile government studies concluding that the price of prescription drugs could rise under a free trade agreement with the U.S.

(Separately, the committee report also mentioned that all three countries are on the Special 301 list, reserved for countries designated by the Office of the US Trade Representative [USTR] to be inadequately protecting US intellectual property rights.)

Need For An Assistant USTR For Public Health?

However, House Democrats have been highly critical of the data protection provisions, which raise protections higher than the TRIPS, which includes only a general commitment to protect marketing approval data. In a related effort, three Democratic members of the Ways and Means panel this month called on US Trade Representative Rob Portman to create a position of Assistant USTR for Public Health and to appoint public health representatives to industry trade advisory committees in the US.

“Currently, an Assistant USTR for Pharmaceutical Policy advocates on behalf of the prescription drug companies when issues arise affecting their industry. However, there is no Assistant USTR to provide an independent voice on public health issues,” they wrote.

Aside from the data protection issue, Andean negotiators have balked at US proposals obligating countries to compensate patent holders for delays in approving drugs by extending the patent period, and an obligation to link that approval to the existence of a patent.

Patent Holder Compensation Linked To Approval Delays

Andean countries have taken the position that such “linkage” does not comport with their own internal systems for approving drugs, where the public health agencies that approve new drugs do not employ patent lawyers. They have argued that it should be the responsibility of the patent holder to challenge patent infringements in court, not the responsibility of public health authorities to protect the patent, according to Andean officials.

Meanwhile, US officials have shown little room for acceptance of Andean proposals on traditional knowledge and biodiversity. The language tabled by Andean countries would require patent applicants for genetic processes to obtain prior informed consent from the indigenous people where those processes originated, and to share benefits derived from the patent.

While the issue of protections for genetic resources and traditional knowledge has come up in the WTO multilateral trade talks, “this is the first time we are raising these issues with USTR” in bilateral talks, according to Marcos Orellana, director of trade programs the Center for International Environmental Law in Washington.

Peru has a particular interest in winning protections in the area, according to Orellana, since there are at least two instances of plant extracts that indigenous people have used for years to treat illnesses being incorporated into research and patented medicines by foreign scientists.