Ramiro Escobar

LIMA, Apr 20 2005 (IPS) — During the ninth round of negotiations of a free trade agreement between the United States and three South American nations in the Andean region – Colombia, Peru and Ecuador – Peruvian President Alejandro Toledo called for "greater flexibility" on the part of Washington.

He also urged an acceleration of the talks, in order to sign the agreement in July.

The current round of talks, which runs Monday through Friday, has been accompanied by protest demonstrations outside the Sheraton hotel in Lima where the negotiators are meeting.

The four teams of negotiators are scheduled to give a joint press conference on Friday.

At a meeting in the government palace with members of the negotiating teams, Toledo called for "flexibility on both sides," which was interpreted by analysts as an allusion to the positions taken by the United States in previous rounds, especially with regard to the issues of agriculture and intellectual property.

The head of the Peruvian team, Deputy Minister of Foreign Trade Pablo de la Flor, told IPS that the talks were moving ahead steadily, and that reaching a final accord could "completely change the profile of Peru’s economy."

De la Flor noted that nearly one million jobs in Peru are already linked to trade with the United States, and that this number could grow if the trade agreement is signed.

Until a few months ago, nearly all Ministry of Foreign Trade officials refused to discuss the political or geopolitical aspects of the trade deal, and in statements to the press attempted to limit the discussion to the economic terrain.

But de la Flor himself said a few weeks ago that the talks were entering the stage of political decisions.

At the end of the first day of the ninth round of talks, on Monday, lawmaker Luis Ibérico of the Independent Moralising Front (FIM – an ally of the ruling Peru Possible party) commented to IPS that "We are entering the phase of political decision-making with respect to the free trade agreement.

"We are standing by our position that we will definitely sign this treaty, as long as we have good negotiations – negotiations that are fully approved by Congress."

In order to go into effect, the trade deal would have to be ratified by the legislatures of the participating countries.

In the case of Peru, there is little doubt that the treaty would win legislative approval.

But civil society organisations are demanding more information and decision-making power with regard to the negotiations. Critics of the proposed trade agreement organised a "week of global action" prior to this week’s talks, focusing attention on raising for debate several controversial aspects of the trade pact with Washington.

With respect to intellectual property, one of the touchiest areas of the negotiations, the U.S. administration of George W. Bush is particularly interested in the question of patents, especially in the area of pharmaceuticals.

Activist Roberto López with International Action for Health (AIS) noted that the U.S. government is insisting that the three countries accept "second-use" patents – which allow pharmaceuticals patented for one use to be repatented for a second – that he said could drive up prices of medicines.

If this kind of patent were adopted, pharmaceutical companies could demand payment if a new use for a particular medicine was discovered, or could restrict the manufacture of less costly generic drugs.

Washington’s proposal would also restrict the manufacture of essential generic anti-AIDS drugs, he added.

"We are facing the risk that medicines will stop being accessible and available," said López.

Health Minister Pilar Mazzetti also said the U.S. position on patents would not be good for the country.

Another aspect of the chapter on intellectual property refers to the use and patenting of biological wealth.

As members of the Andean Community (along with Bolivia and Venezuela), the three South American countries must respect the trade bloc’s Common Regime on Access to Genetic Resources, adopted in 1996, which recognises the strategic value of the region’s vast biodiversity and bans the patenting of plants and animals.

Another sensitive subject is agriculture. Last week, farmers meeting in the National Convention on Peruvian Agriculture (Conveagro) held protests and staged roadblocks in which several demonstrators were injured and many arrested.

A number of agricultural products in Peru, including corn, cotton, barley, wheat, beef, rice, cooking oil and dairy products, could be seriously affected if the U.S. government does not eliminate or reduce the enormous subsidies it shells out to U.S. farmers, the president of Conveagro, Luis Zúñiga, commented to IPS.

The United States grants 94 billion dollars a year in subsidies to farmers. U.S.-produced rice carries a subsidy of 51 percent and wheat 34 percent, while in Peru this kind of protection virtually does not exist for agricultural producers.

Zúñiga said there are two ways of offsetting the "unfair competition": adopting subsidies in Peru or maintaining import tariffs. But neither of these ideas has been accepted in the talks.

According to the Peruvian negotiators, the proposed accord is an effort to extend the benefits that Washington has granted the Andean nations through the Andean Trade Promotion and Drug Eradication Act, which temporarily permitted the import of a number of products into the U.S. market with preferential treatment.

The negotiators argue that the strong "asymmetries" in terms of trade between the United States and the three South American countries should be taken into account in the accord.

Peru is the United States’ 52nd largest source of goods, and accounts for a mere 0.19 percent of its imports.