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Tuesday, June 22, 2004



Thorny Thai trade issues
hang on Honolulu talks

Meetings next week address
the pros and cons of a U.S. pact


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 Monday in Honolulu 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 nongovernmental 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 $300 million to $400 million more per year.

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