US-Thai free trade negotiations: There’s little trust in trade talks

Bangkok Post, 5 April 2005

US-THAI FREE TRADE NEGOTIATIONS

There’s little trust in trade talks

Negotiators say the FTA will be open to comment, but critics want their say now before it is too late

By ACHARA ASHAYAGACHAT

Representatives of the United States and Thailand negotiating a free trade agreement may deride FTA Watch, the HIV/Aids patients network and other NGOs who protest the pending agreement as "regular critics with no new arguments", but these people raise valid questions.

But their queries fall on deaf ears. Peter Allgeier, acting US trade representative, said in Washington recently: "Consultations, negotiations and litigation are among the tools at our disposal, and we are using all of them aggressively to make sure that Americans are treated fairly." And here in Thailand, chief negotiator Nitya Pibulsonggram said it was not time yet to hear from civic groups and the public on the agreement.

Mr Nitya has told the media and public to trust in his unblemished diplomatic career as a guarantee that he has the best interests of the country at heart.

"The door for consultation will open when the talks touch upon issues of concern and by that time [these regular critics] should have new and constructive proposals to argue," he said.

But people want their say now. The government has failed to make the consultation process democratic or meaningful, said Somkiat Tangkitvanit of Thailand Development and Research Institute. Issues being discussed which raise concern include intellectual property rights, telecommunications, and the finance and banking sectors, he said.

Consumers could benefit from US telecom and banking services being made available here but the local regulators - the Bank of Thailand and the National Telecommunications Commission - and operators are opposed to their entry into the Thai market.

Intellectual property rights represent a lose-lose situation for consumers and for drug companies, agriculture and education, as well as electronic commerce.

Narongchai Akrasenee, a former chairman of the FTA monitoring team, said all three issues were controversial but it was in the area of intellectual property rights that Thailand could face the most difficulties as the country is without a national strategy on this matter. Master plans on telecom and banking have already been implemented.

"It’s about timing as the US might want to see it [the agreement signed] sooner rather than later," said Mr Narongchai. "It’s about the policy of the government. It’s up to them." It took the American negotiators 18 months to hammer out a similar deal with Singapore, while talks with Chile took from 1996 to early 2004.

The Trade Promotion Act should encourage Washington to conclude the deal this year and the expiring Treaty of Amity is another incentive for the US to conclude things since Thailand has sought only a short-term extension to the treaty from the World Trade Organisation.

Mr Somkiat of the TDRI said: "We may have to look at the overall trade-off, whether it’s worthwhile [for the liberalisation] or not and the government needs to explain its plans to redistribute gains from one sector to another that is adversely affected by the bilateral arrangement."

The government is at last making some effort to explain the free trade agreement with the United States to the public, but this has not quelled all opposition. Civic groups have called another rally for today in front of the Royal Cliff Hotel in Pattaya, venue of the third round of FTA talks, under the theme "No Patent on Life - No Patent on Humanity".

The US administration has notified the congress of an array of commercial and political gains it expects to reap from the agreement, including the opportunity to address such sensitive issues as the trade in automobiles, intellectual property rights protection and improved labour and environmental standards. For its part, the Thai Rak Thai government has spoken only vaguely about the FTA helping facilitate the export of farm products to the giant US market.

It was similarly reticent when negotiating a a free trade agreement with China, and the result has been damage to local garlic and onion farmers and other fruit and vegetable growers like the Doi Kham royal projects in the North of the country.

"There has to be a balanced outcome," said Kobsak Chutikul, a former diplomat and member of parliament. "And the benefits cannot be measured just in terms of trade figures or how much exports increase. We must aim to achieve the greatest benefit for the greatest number of people. If a few benefit from more export opportunities while many more are adversely affected by increased imports, this will not do."

"Hidden costs in terms of lost opportunities for development which cannot be measured in dollar amounts also need to be taken into account."

Mr Somkiat said the US negotiation process involved lawmakers, academics, NGOs and farmers in the US and here in Thailand, while the Thai process was piecemeal.

"The attitude that civil society can be involved only in the latter half of the negotiations is completely wrong since it does not sound out solutions satisfactory to all," he said.

There should be briefings not just on what the US has tabled for negotiation but on what steps the government is contemplating taking so interested parties can offer alternative proposals, Mr Somkiat said.

A retired diplomat who asked not to be named said: "At the negotiating stage, we need professional trade negotiators, not generalists. It is a hard bargaining process where the interests and not good relations are the determining factor. Neither of our chief trade negotiators in the case of Japan and the US have a track record in trade negotiations."

It is only when the nuts and bolts of the negotiations are complete that a broader view can be applied, and general considerations about good relations can be invoked to find policy compromises on the technical issues that trade negotiators have not been able to agree on, he said.

Viboonpong Poonprasit, a lecturer in political science at Chulalongkorn University, said the public and civil service should be careful in their interpretation of "friends" and "long-time friendship" in any bilateral context since the US was only interested in its own interests in its interactions with Thailand while the Thai side usually referred to feelings of intimacy and friendship.

"We should not assume that the US thinks as we do," he said. "It’s a different culture."

It is not only academics and NGOs who are feeling ignored on the FTA issue but also lawmakers. Members of the Democrat party and senators, including members of the foreign affairs and human development committees, are also feeling left out.

Mr Nitya said that at the end of the day the agreement needed the final endorsement of the parliament. "Thai law is different from the US, it allows the administrative arm to enter into talks and seek endorsement when necessary."

Jiraporn Limpananond, head of the Social Pharmaceutical Research Unit at Chulalongkorn University, warned that people needed to speak up and the government should take heed of this reality.

"It’s a vicious cycle that comes every 20 years," she said. "Thailand amended the patent law seven years after pressure from the US in 1985 and the government has promised to set up adjustment funds for affected industries/players including drugs, but so far nothing has been set up. Now the pressure comes again with a more incredible demand of extending the monopoly period for another five years and two years of data exclusivity for patented and non-patented drug production."

The US bilateral push for global uniformity on high pharmaceutical prices through aggressive intellectual property protection and an increased patent life will affect large generic pharmaceutical industries in Thailand, she said.

Kingkorn Narintarakul Na Ayutthaya of FTA Watch said the US administration had made many promises to groups likely to be disadvantaged. Yet assurances - for example, to Florida fruit and vegetable growers of increased food quarantine and inspections for pesticide contamination - were never honoured. Similarly, when Mexican tomato imports to the US rose 70% under the the North American FTA, or Nafta, and the Florida tomato industry lost $750 million (29.6 billion baht), guaranteed government relief evaporated. US promises to protect labour standards in Mexico also were never properly implemented, Ms Kingkorn said.

Clearly, the government must adjust its consultation process and its critics must do more than just stage noisy protests. Arriving at the best deal for farmers and consumers requires more time and more muscle and coordination.

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source: Bangkok Post