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Removing IPR - too much at stake for Thailand

The recently concluded round of US-Thai FTA negotiations brought little contentment for the Thais, especially those with direct interests in maintaining the existing degree of intellectual property right (IPR) protection already in place. The demonstrators and protestors during the recent negotiations, who were made up of different groups of civil society, including farmers, NGO’s and persons living with HIV, were focussed mainly on demanding the removal of IPR in the negotiations.

The issue at hand is not whether to include IPR in the negotiations as this does not begin to address the dynamics behind an FTA with the US at all. As suggested from previous US negotiations on FTAs, IPR is one of the most prioritized issues on any negotiation table involving the US. What needs to be established is a concrete focus by Thai negotiators on getting the most out of an FTA with the US. The head of the negotiation team, Mr. Nitya Pibulsongkram, stated that, “finally, whatever we have to sacrifice must be sacrificed, if that helps get a better deal", and although it has received much criticism in the Thai press, it is perhaps an illustration of the benefits that Thailand stands to gain. Would it be wise to risk the chance of FTA negotiations with the US coming to a standstill? If Thailand was negotiating with a somewhat lesser country then there should be no hesitation in pulling IPR right off the agenda, but this is not the case. Every FTA undoubtedly has its winners and losers on both sides (it appears some more than others when dealing with the US), but would Thailand be better off threatening a set back in its FTA negotiations with the US? Does Thailand stand to gain anything more than it stands to lose from a delay in negotiations?

There is no doubt that the issue of IPR has certain implications for Thailand and its people but perhaps there are other factors that are more noteworthy. The principal question is whether Thailand is in a position to be able to throw IPR out the window and still be able to negotiate an FTA with the US that consists of at least something beneficial for the Thai people. It must be kept in mind who they are dealing with. Thailand is not alone, Australia would have much preferred an FTA with the US that included sugar and excluded the stronger patent rights on drugs that US pharmaceuticals pressured for. And Chile was pressured into abandoning its capital controls, its agricultural price band system and accepting IPR provisions that, similar to Thailand’s present situation, now extend far beyond that covered within the TRIPS agreement.

Not forgetting the economic opportunities an FTA with the US could have, focus should be on creating a beneficial and comprehensive bilateral FTA that spans across as many sectors as possible. And if this means that IPR needs to be laid out on the negotiating table and not thrown out as many have suggested, then so should be the case. The US remains Thailand’s strongest export market making up 20% of all exports and as competition continues to grow from the likes of China, the South Americans and new bilateral partners, Thailand should look to the bigger picture and secure what it can. This is not to suggest that the Thai negotiating team sacrifice everything, but are aware that there are economic benefits that Thailand stands to gain and continued objective negotiations are the key to accessing them.

With recent Congressional pessimism and increasing opposition from the Democrats (and even some of the Republicans), the US’s bilateral optimism appears to be fading fast. Republican senator Sexby Chambliss (Georgia) recently explained his reservation towards bilateral trade agreements suggesting that he needed to be sure that “American industries and workers are truly benefiting from these agreements.” The Democrats, who have traditionally supported all initiatives with respect to trade agreements, are now calling for details of how these bilaterals are going to improve the existing trade deficit which may soon reach a trillion dollars.

With growing US concern on the true benefits of bilateral agreements, and with increased scrutiny as to their direct impact on the US trade deficit, negotiations are only likely to get even more complicated and more difficult than they already are. The Thailand-US FTA is already on its way and completion, via a sound, carefully thought-out and dynamic negotiating process, should be the primary focus of the Thai negotiating team.

Christopher C. Seeley