MEXICO CITY: Officials from the United States and 11 other Pacific Rim countries have extended negotiations on an ambitious and controversial trade deal in a bid to seal a final agreement.
In Atlanta, the US state of Georgia, trade officials were scheduled to wrap up talks on the Trans-Pacific Partnership (TPP) trade agreement on Thursday, but have yet to patch up major differences in several areas.
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.
Mexico entered this week’s negotiations with specific targets in mind: keeping the patent protection time frame for biotech drugs between five and seven years, and securing high local content minimums for automotive exports. This put it at odds with the United States that was seeking a 12-year time frame for patent protection.
However, as negotiations were extended, it appears Mexico has decided to compromise on biologics.
According to Mexican news magazine Progreso, the country’s negotiators agreed to an eight-year protection period for biotech drugs in exchange for a 45 percent minimum local content requirement for cars.
The magazine was critical about this decision, saying it left millions of Mexican patients years away from accessing the newest drugs.
However, Mexico is likely to choose to focus on the automotive sector, given the vast influx of automotive companies opening factories in the country. In the last couple of years, Mexico has been seeing an increasing number of luxury automotive brands such as Mercedes-Benz, BMW and Audi open factories within its borders.
In order to protect this trend, Mexico teamed up with Canada to restrict the further opening-up of the North American market to foreign cars, particularly those from Japan. The securing of a higher minimum local content requirement is therefore an important step to secure the continued growth of a sector that accounted for 6 percent of Mexico’s GDP in 2014.
The other Latin American countries involved, including Chile and Peru, may have been disappointed at Mexico’s decision to compromise on the issue, as this may force them to accept the longer patent protection period without a corresponding boost to a key sector.
On Thursday, Joseph Stiglitz, the famed Nobel Prize-winning economist, slammed the Peruvian negotiation tactics, describing them as “capitulating to the demands of developed countries.”
He said the TPP, if signed in its current form, would see “the theft of genetic material from the Peruvian Amazon…to benefit big pharmaceutical companies and drive up the costs of generics.”
“If President (Ollanta) Humala wants to do the right thing for the Peruvian people, he will instruct his minister of commerce in Atlanta to ensure that his citizens will be able to access drugs at affordable prices,” he stated.
With little evidence that the Peruvian delegation was making any headway to change this by Saturday, the country’s press also expressed their discontent.
In a scathing editorial, Peruvian daily La Republica wrote that South American countries which already had a free trade agreement (FTA) with the United States, namely Colombia, Peru and Chile, now all saw yawning trade deficits.
It said that the TPP’s stance on drugs “would worsen inequality, with the top 1 percent earning more and the bottom 99 percent paying higher prices for medicine.”
Australia picked up the gauntlet of drug patent protection on Saturday, defying the U.S. eight-year compromise. Australia has stuck to its five-year demands, which has found some support in Washington.
Democratic presidential candidate Bernie Sanders tweeted on Saturday that “making sure people in poor countries have access to life-saving medicine is our moral responsibility.”