Chile Minister Wants U.S. concessions in TPP

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By Tom Azzopardi

Aug. 18 — The U.S. government will have to make further concessions if it wants to reach agreement on the Trans Pacific Partnership (TPP), following the failure of talks last month in Hawaii, Chile’s Foreign Relations Minister Heraldo Munoz said.

The U.S. “is going to have make additional efforts,” the minister said, noting that signing the intra-regional trade deal would be the crowning achievement for President Barack Obama after a year full of foreign relations triumphs. “We suppose that there will be another attempt in September to overcome the pending issues,” the minister said.

But the window of opportunity to finalize talks is brief, given the proximity of elections in Canada and presidential primaries in the U.S., according to TPP officials.

Speaking before the Foreign Relations Committee of the Chamber of Deputies in Valparaiso, the minister said Chile, Malaysia and Peru remain determined not to accept the U.S. proposal to extend the length of patents on biological pharmaceuticals beyond the five years stipulated in Chile's law.

The U.S. initially pushed for 12 years of protection, reduced to eight during the most recent rounds of negotiations.

But Chile is adamant on this issue. “We will defend this position to the death,” said Munoz.

Another red line is the refusal to accept U.S. demands to revise implementing legislation in member countries. “With that there is simply no deal,” the minister added.

Chile, a pioneer in the development of bilateral agreements, is keen for the benefits of increased market access and clearer rules on non-tariffs barriers that the pact promises, estimated to bring benefits worth US$3 billion or 1 percent of Chile’s GDP.

But its position on drugs patents is more than just a point of principle. Legislation promulgated by President Michelle Bachelet earlier this year requires the state to cover the medical costs of thousands of patients from catastrophic diseases requiring extremely expensive treatments.

The new fund is expected to cost US$ $144 million from 2017. But that figure could rise significantly if access to cutting-edge treatments were delayed.

Chile is hopeful that the U.S. demand for longer patents may go the way of other demands, such as patents for living things and surgical procedures, both abandoned during negotiations. Chilean officials said the U.S. has offered a possible compromise by including the estimated three years of required testing for biological treatments within the eight years demanded by the U.S. while respecting the five year length for drug patents demanded by Chile. Chile has yet to study whether such a proposal is workable, the official said. However the U.S. is also demanding an additional three years for patents on second-use discoveries, something Chile adamantly opposes.

Chile is not the only country standing in the way of a final deal. Munoz noted that Mexico, whose trade minister he met last week during a state visit, remains unmoved on the issue of rules of origin for automobiles while New Zealand is holding out increased market access for its dairy farmers.

To contact the reporter on this story: Tom Azzopardi in Valparaiso, Chile, at correspondents@bna.com

To contact the editor responsible for this story: Jerome Ashton at jashton@bna.com