UPDATE 2-Japan demands U.S. find drugs compromise in Pacific trade talks

(Adds New Zealand trade minister comments, byline)
By Kevin Krolicki and Krista Hughes
ATLANTA, Oct 3 (Reuters) - Japan called on the United States
to find a way to break a deadlock over protections for
next-generation medicines on Saturday as talks on a sweeping
trade pact were extended for another 24 hours.
Negotiators have been up all night trying to broker a deal
on the 12-nation Trans-Pacific Partnership, which will create a
free trade zone covering 40 percent of the world economy.
A push by the United States to set a longer period of
exclusivity for drug makers who develop biological drugs like
Genentech's Avastin cancer-treatment has run into opposition
from other TPP economies and is holding up a broader deal.
Japanese Economy Minister Akira Amari said he had agreed to
a U.S. request to stay on in the southern city of Atlanta for
another 24 hours, but said the United States had to find a way
forward on biologics.
"I said there were two conditions for us to accept that
proposal: first, this would be the last chance, in other words
there had to be certainty of getting a deal on pharmaceuticals;
second, because of the schedule, Japan could not accept any
further extension," Amari told reporters.
The United States allows pharmaceutical companies an
exclusive period of 12 years to use clinical data behind the
approval for a new biological drug.
The Obama administration had previously proposed lowering
that threshold to seven years but has pushed a proposal for an
eight-year minimum in the TPP talks in Atlanta.
Australia, along with others such as New Zealand and Chile,
have been unwilling to offer more than five years protection for
the medicines since longer terms will push up the cost of
state-subsidized medical programs.
New Zealand Trade Minister Tim Groser said the impasse is
holding up a deal on trade in dairy products, New Zealand's main
interest, and repeated that the country would not be pushed out
of the pact. "We are not shooting for the stars," he said.
Groser warned that failing to seal a deal would have
long-term strategic implications for the United States and all
its trading partners. ID:nL1N1230RP
"You can see the summit within reach and it's just a
question as to whether or not you've got just enough political
energy to reach out and do the last little bit," he said.
Canadian Prime Minister Stephen Harper, whose party faces a
general election later this month, said the talks had made
progress.
"Let me assure everyone that we will only conclude a deal
that is in the best interests of our country," he told reporters
in Montreal.
Harper's Conservatives are on course to win the most seats
in the Oct. 19 election but may lose their majority, and the
main opposition party has said it would not feel itself bound by
any TPP deal that Harper negotiated.