Bangkok Post
January 10, 2006

Offers to meet with critics of patent policy

US officials insisted yesterday that negotiations over patent issues would not result in reduced access to drugs by Thai patients, a key point of contention among opponents to the Thailand-US free-trade talks. "Our objective is to promote the development of new drugs while ensuring access to medicines so Thai HIV/Aids and other patients will continue to be able to obtain the newest and most effective medicines," said Neena Moorjani, a spokeswoman for the Office of the United States Trade Representative.

Thousands of people yesterday continued to protest at the talks in Chiang Mai. They say the free-trade agreement would undermine national sovereignty, result in higher product prices and cut off access to generic drugs for local patients.

Thai and US negotiators are in Chiang Mai until Friday for their sixth round of talks since mid-2004, with both sides hopeful of an eventual agreement within the next few months.

Ms Moorjani said patent issues related to pharmaceuticals would be discussed this week, but added that protesters were misguided in their claims that a deal would result in higher prices for drugs.

"The FTA will not increase the price of generic or innovative drugs," she said.

The United States welcomed the protests as a display of democracy in Thailand, she said, adding that trade negotiators would be willing to hold meetings with local non-government organisations to help to build understanding regarding the trade deal.

"Our long-standing invitation to FTA Watch still stands _ we would like to sit down with them to discuss their concerns and clear up the misunderstandings they have about our efforts," she said, referring to a network of NGOs opposing the pact.

Ms Moorjani said the talks this week were crucial for both sides.

"We are meeting to talk about how we can make sufficient progress to make sure we finish by the spring. Besides the negotiations sessions, we have a lot of meetings planned with Thai and US business groups, labour unions and members of Parliament," she said.

The head of the US delegation is scheduled to meet with some MPs today.

Critics have recommended that Thai negotiators should consider any US demands regarding intellectual property (IP) rights carefully.

Somkiat Tangkitvanich, a researcher with the Thailand Development Research Institute, said the US typically required trading counterparts to commit to conditions for IP protection, particularly for pharmaceutical patents, that went beyond existing international agreements.

He noted that the US-Chile trade agreement included a number of restrictions on generic drugs and unlicensed imports, which the US was likely to also require in a Thai agreement.

Market access for services is another critical issue to be discussed this week, particularly regarding the financial sector.

Naris Chaiyasoot, director-general of the Fiscal Policy Office, said talks on the financial sector would be held tomorrow and Friday.

He said he hoped to sidestep a long-standing debate over the framework of the negotiations by using the concept of "mutually acceptable lists", where the focus would be on sectors of joint benefit.

Thailand wants to use a "positive list" approach to the talks, where only those services and goods explicitly named in the agreement are scheduled for liberalisation. The US, however, has argued for a ''negative list'' approach, where all sectors are deemed to be covered by the agreement unless they are explicitly named.

Mr Naris said any agreement would represent a compromise.

While the US could benefit from greater access to the Thai financial sector, language barriers would be a potential obstacle to new entrants.

In terms of goods, Thailand would benefit from greater access to the 295 million consumers in the US, a market of 290 million that dwarfs Thailand's 65-million population.

The US is Thailand's largest trade partner, with exports for the first 11 months of 2005 worth US.6 billion, up 10.4% from the same period in the previous year. Imports over the period from the US totalled .9 billion, up 18.9% from the previous year.

For trade in goods, the US has proposed slashing industrial tariffs on 22.3% of industrial product categories to zero immediately, up from an original proposal covering 15.5% of total product lines.

Thailand, which maintains higher import tariffs than the US, has offered to cut import duties on 38.7% of industrial products to zero immediately under the agreement. Average import tariffs for Thailand stand at 20%, compared with an average rate of less than 5% for the US.

Washington also proposed to cut import duties on key Thai products, including gems and jewellery, watches and parts, within five years.

But progress remains slow on proposals to cut tariffs on other key Thai exports, including canned tuna, vehicles and parts, and footwear.