US embassy cable - 05LIMA1092

UNCLAS SECTION 01 OF 02 LIMA 001092 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR WHA/AND, EB/IPE SWILSON 
COMMERCE FOR 4331/MAC/WH/MCAMERON 
USTR FOR BHARMAN 
 
E.O. 12958: N/A 
TAGS: KIPR, ETRD, ECON, PGOV, PE, FTA 
SUBJECT: PERU'S IPR NEGOTIATOR RESIGNS, BUT THEN STAYS ON 
 
 
1. (SBU) Summary. Infighting between the Ministry of Trade 
(Mincetur) and Indecopi (Peru's IPR administrative agency) 
over Peru's intellectual property rights position in the FTA 
negotiations has become increasingly heated.  Following the 
resignation of Peru's lead IPR negotiator and Indecopi 
employee, Luis Alonso Garcia, both institutions have gone 
public to air their differences.  In an effort to quell the 
rift, Prime Minister Carlos Ferrero decided that Garcia 
should remain the lead IPR negotiator, but would follow 
Indecopi's direction.  While the situation appears resolved 
for the moment, internal debates over the data exclusivity 
protection issue will likely require President Toledo's 
intervention.  End Summary. 
 
Mincetur and Indecopi at Loggerheads 
------------------------------------ 
 
2. (SBU) For months, Mincetur and Indecopi officials have 
disagreed privately on Peru's IPR policy during the FTA 
negotiations.  Notably, Indecopi is against providing data 
exclusivity protection for pharmaceutical and agrochemical 
products.  Before the Cartagena FTA round, Indecopi had 
prepared a document that it had intended to publish; 
Mincetur successfully quashed the report by convincing 
President Toledo to intercede.  In recent days, both 
Indecopi President Santiago Roca and Trade Minister Alfredo 
Ferrero have gone public with their differences. 
 
Lead Negotiator Resigns... 
-------------------------- 
 
3. (U) In mid-February, Indecopi privately informed Mincetur 
that it did not support Mincetur's views on IPR issues and 
was withdrawing support from its IPR negotiator in the FTA 
negotiations.  On February 19, Luis Alonso Garcia, Peru's 
lead IPR negotiator and Indecopi employee, resigned in 
protest of Indecopi's actions.  According to a Pharma 
contact, Garcia (who supports the Mincetur view) did not 
want to be criticized later as the GOP representative who 
"lost" the data exclusivity issue.  Garcia, he said, seeks 
GOP political support. 
 
...But is Reinstated 
-------------------- 
 
4. (SBU) Prime Minister Carlos Ferrero met with Chief FTA 
Negotiator Pablo De la Flor and Santiago Roca for two hours 
on February 22 to discuss Garcia's resignation.  The Prime 
Minister decided that Garcia would stay on as lead 
negotiator but take direction from Indecopi.  If Mincetur 
wants Indecopi to modify Peru's IPR policy, Mincetur must 
formally notify Indecopi and assume responsibility. 
Mincetur is not satisfied with the Prime Minister's 
decision.  De la Flor told us that he believes this 
arrangement is untenable, as Indecopi (and thus the lead IPR 
negotiator) would not accept Mincetur direction.  Roca told 
us that it would be better if Mincetur hired Garcia 
outright, but indicated that Mincetur was not ready to take 
that step. 
 
IPR Chief Rocking the Boat 
-------------------------- 
 
5. (SBU) Indecopi President Santiago Roca (who holds a PhD 
in economics from Cornell) told EconCouns on February 24 
that Peru needed to increase its technological capabilities, 
and that the FTA should be the vehicle to reach that 
objective.  Roca said that that the FTA and IPR chapter 
should help foster the development of new technology in 
Peru.  EconCouns noted that science and technology 
cooperation is under consideration, but ultimately it is the 
private sector with new investment that advances a country's 
technology.  Roca suggested that a separate IPR, science, 
and technology agreement, not part of the FTA, would be more 
beneficial for Peru. 
 
6. (SBU) While claiming he supports the FTA, Roca stated 
that Peru is not at the same level as the United States on 
intellectual property issues, and thus should not commit to 
long-term protection for American products without something 
in return.  Extending data exclusivity for American 
products, he argued, would largely benefit the United 
States, not Peru. 
 
Mincetur: This Guy is Bad News 
------------------------------ 
 
7. (SBU) Mincetur officials, on the other hand, privately 
recognize that Peru needs to provide data exclusivity 
protections.  Pablo de la Flor, Peru's lead FTA negotiator, 
told EconCouns on February 23 that Peru would move closer to 
the U.S. IPR position, but advised that the recent spat has 
made his job more difficult.  He noted that Peru did not 
back Colombia and Ecuador's proposal in Cartagena for a 
three-year period of data exclusivity because of 
difficulties with Indecopi, which does not support the idea. 
 
8. (SBU) De la Flor noted that several months ago Santiago 
Roca had sent President Toledo a letter recommending that 
the IPR chapter be dropped from the FTA negotiations.  The 
Vice Minister never saw the letter, but he visited Roca when 
he heard about it.  De la Flor described Roca as ill 
informed on IP issues and surrounded by advisors who do not 
believe in pharmaceutical patent protection.  A series of 
four increasingly nasty letters between Trade Minister 
Ferrero and the Indecopi President followed. 
 
9. (SBU) De la Flor finds puzzling Indecopi's sudden change 
of heart 10 months into the FTA negotiations, noting that 
Indecopi appointed Garcia as the lead IPR negotiator for 
Peru prior to the start of the FTA negotiations.  De la Flor 
did not see a solution to the problem, and the departure of 
Roca from Indecopi is unlikely since he is a close friend of 
President Toledo. 
 
Private Sector Critical of Indecopi Chief 
----------------------------------------- 
 
10. (SBU) Members of the private sector lament the public 
squabbling and are concerned that the Mincetur-Indecopi 
dispute could undermine general support for the FTA, which 
enjoys more than 70 percent approval in recent public 
opinion polls.  The Indecopi President has been criticized 
for raising his differences so close to the end of the FTA 
negotiations.  Others have called for President Toledo to 
get more involved in the FTA process.  One Pharma rep told 
us that the debate is not about substance, but rather a 
dispute between strong personalities who do not want to be 
perceived publicly as having caved to U.S. pressure on IPR. 
 
Comment: Toledo Needs to Weigh In 
--------------------------------- 
 
11. (SBU) The sensitive data exclusivity issue has become a 
political matter that President Toledo will probably have to 
resolve.  Neither Mincetur nor Indecopi wants to be held 
responsible for having agreed to data exclusivity 
protection, a U.S. priority, for fear of political 
criticism.  Meanwhile, Mincetur is seeking a meeting with 
the President to brief him on the FTA negotiations and to 
get him more involved in the decision-making process. 
 
STRUBLE