U.S., Thailand to start free trade talks, clouded by various concerns
U.S., Thailand to start free trade talks, clouded by various concerns
Daniel Lovering, Associated Press, Bangkok, Thailand
For more than a decade, Thailand has concocted low-cost
generic drugs at a government laboratory to produce treatments
for AIDS patients.
But a planned free trade agreement with the United States
could effectively block Thailand from making affordable copies of
the drugs developed by U.S. companies in the future, leaving as
many as 35,000 patients to pay the ultimate price.
Intellectual property rights to U.S. drugs are among a range
of issues such as copyright infringement, food safety standards
and protecting farmers' interests that will need to be sorted out
by Thai and American negotiators when they meet June 28 in
Honolulu, Hawaii, for the first round of talks on the free trade
agreement.
Critics feel Thailand will see few benefits from the pact and
may lose out on several fronts, citing the concessions Thailand
would be asked to make to effectively extend U.S. patents on AIDS
drugs.
"The government hasn't shown any positive proof to assure the
Thai people that we will benefit in general," said Jacques-Chai
Chomthongdir of the non-governmental organization Thai FTA Watch.
"Their only claim is, 'This is good; this is good for the Thai
economy,"' he said.
Chomthongdir and others say the FTA, which would bring down
import duties, would largely benefit U.S. businesses and farmers.
Thailand's trade tariffs average about 15 percent, with the
highest taxes levied on agricultural products.
U.S. trade tariffs are already low at an average of roughly 8
percent, and lowering that to zero is unlikely to offer a big
advantage, said Nobel prize-winning economist Joseph Stiglitz.
"On average, the gains are going to be minuscule," he said in
a telephone interview from New York.
"Thailand needs to look very skeptically at what benefits it
might achieve," he said. "That foreign investors are signing a
free trade agreement is not a sign of good housekeeping or seal
of approval that will lead to a flow of capital into the
country," said Stiglitz, a former World Bank chief economist and
adviser under U.S. President Bill Clinton.
Thai negotiators and U.S. officials, however, say the pact
could significantly boost trade and investment between the two
countries. One official projected the U.S. agriculture sector
alone would earn US$300 million to $400 million more per year.
According to the Thai government, the FTA would help the
country's economy grow by as much as 4 percent, partly through
greater access to U.S. markets for Thai goods, mostly farm
produce.
About 65 percent of Thailand's 63 million people are farmers
and the country is the world's biggest rice exporter.
"This is where we compete and compete well," said Thailand's
chief trade negotiator, Nitya Pibulsonggram.
Among those expected to benefit in the United States are
Californian and Oregonian wine makers, apple farmers, cotton
growers, information technology companies, auto makers and
medical equipment suppliers.
Trade between the United States and Thailand is already
robust, totaling nearly $21 billion in 2003. The United States
absorbed about $15 billion worth of Thai products and exported
goods worth almost $6 billion to Thailand.
Major Thai exports to the United States last year included
computers, their accessories, jewelry, shrimp, fish and apparel.
U.S. products to Thailand included integrated circuits, civilian
aircraft, soybeans, semiconductors and cotton.
No time frame has been set for completing the FTA
negotiations. It is not yet known how much the duties will be
reduced initially although the ultimate goal is to eliminate
them. The first round will last one week.
Nitya, the Thai negotiator, said non-tariff barriers represent
about half the obstacles in the negotiations.
Thailand will make "no demands, but there are things that we
want fixed - questions relating to market access," he said.
He cited U.S. sanitary and food safety standards that bar some
35 percent of Thai agricultural products from entering U.S.
markets.
Thailand wants to "sell more products to you and some get
stopped at the gate ... we want to have ways and means of
overcoming" the hurdle, said Nitya, a former Thai ambassador to
Washington.
One of the biggest hurdles is the demand by U.S.
pharmaceutical companies for far-reaching intellectual property
rights to patented AIDS and other drugs.
The issue is an emotive one in Thailand, where an estimated
600,000 people are living with HIV/AIDS. Of them, at least 35,000
are currently dependent on life-prolonging drugs, which are
produced generically in Thailand by the Government Pharmaceutical
Organization. One person's dose costs about US$30 per month while
the U.S. versions cost upward of $500.
"We have to think of the future ... You want to leave them
(AIDS patients) to die like that?" said Dr. Krisana Kraisintu, a
former head of research at the GPO who pioneered the development
of generic AIDS drugs in Thailand starting in 1992.
Nitya refused to say if Thailand will oppose the demand, but
indicated that it would be difficult for the government to
accept.
"The public health issue is a major one and it's one of my
concerns," he said. "If we came away with fewer or with less
access to wonderful new things (drugs) ... then I think we're
going to be in trouble."
Thailand's failure to clamp down on its illegal trade in
pirated software, CDs and other intellectual property will also
be a sticking point.
Among the most politically charged issues will be sugar, of
which Thailand is among the world's largest producers. U.S. sugar
producers, spread across 16 states, have fought fiercely for
sugar to be left out of the negotiations.
"We're going to put that on the table anyway," Nitya said. "No
one would allow us to sell our shirt to get this FTA."