Ecuador has pulled out of discussions with the US over a proposed Andean Free Trade Agreement (FTA), after failing to come to an agreement over a number of issues, including pharmaceutical patents. The US Trade Representative's Office is hoping that talks will be resumed in early 2006. The news dashes US hopes that they would wrap up the agreement by the end of the year.

Under the FTA, the US is calling for the Andean nations to implement strict patent protection laws in order to combat the trade in cheap copy medicines, prevalent in the region. However, this is a politically sensitive issue in Ecuador, where around 70% of the population live in poverty and rely on copy drugs as a cheap source of healthcare. Industry sources fear that the intellectual property accords will result in a sharp rise in drug prices reducing access to medication for large sections of the country.

Further, the local drug manufacturing industry has outlined concerns that under the FTA, domestic firms will have to compensate US drugmakers if there are "unreasonable" delays in obtaining local patents. Ecuador also wants safeguards put in place protecting native plants with medicinal value from bio-piracy.

However, some market observers claim that Ecuador's refusal to agree owes less to the actual make-up of the treaty and more to wider political dimensions. There is strong internal opposition to any FTA with the US. In the past weeks, thousands have flocked to the streets of the capital Quito to protest against the trade talks.