Tariff downgrade over violations will hit Thai exporters

[dirtydog]

TRADE PRIVILEGES
US set to strike back over rights


Tariff downgrade over violations will hit Thai exporters


Many Thai exports to the United States are expected to lose tariff privileges today, when Washington places the Kingdom on its intellectual-property Priority Watch List.

An announcement of the downgrade was expected early this morning Thailand time and comes in the wake of inadequate protection of intellectual-property rights.

The downgrade comes with stiff trade retaliations.

The US Embassy in Bangkok is scheduled to hold a news conference later today.

However, local officials expect Thailand to be downgraded to priority-watch status, because of conflicts between the Public Health Ministry and US drug companies following the Kingdom's decision to invoke World Trade Organisation rules allowing it override patent protection on selected drugs.

In addition, worsening copyright violation of audio-visual products further hamper Thailand's chance of being spared retaliatory action, says international-trade experts.

Commerce Minister Krirk-krai Jirapaet believes Thailand will be downgraded, because influential companies are pressuring the US government. These companies accuse Thailand of being slow in stamping out intellectual-property violations.

Many US companies and trade groups - including Levi Strauss, Philip Morris, the Cable Broad-

casting Satellite Association of Asia and the American Apparel and Footwear Association - are urging Washington to punish Thailand for growing product counterfeiting. Of most concern are brand-name apparel and accessories and audiovisual products.

The Washington-based US-Asean Business Council yesterday expressed concern that the downgrade would hit US investors and their trading partners.

Krirk-krai said council president Matthew Daley was afraid Thailand would be downgraded as a result of the compulsory licensing of drugs.

Daley and other US businessmen in Thailand - particularly new entrants - are anxiously awaiting final wording of amendments to the Foreign Business Act.

"Most American businessmen are looking forward to the final agreement, so they can understand clearly the policies of the government towards foreign investors," Daley explained.

The US Trade Representative categorises 63 trading partners into four groups in descending order of intellectual-property infringement: priority country, priority watch, watch and monitoring. Each is subject to different degrees of trade protection.

Thailand has held watch-list status since 1992, following improvements in property-rights protections. It was on priority watch from 1989-92.

Krirk-krai accepts that the US government must respond to corporate demands to protect domestic businesses. If Thailand is downgraded today, he will seek to mitigate the effects on exports in negotiations with Washington.

A downgrade to priority watch could see the loss of tariff privileges on exports under the Generalised System of Preferences (GSP). The US is scheduled to announce revisions to this by midyear.

Exports at risk of losing GSP benefits include jewellery, tyres, electric appliances and plastic goods. These products receive the most GSP benefits.

At present, 18 per cent of exports enjoy duty-free status, compared with normal tariffs of 2-14 per cent.

A Commerce Ministry source who asked not to be named confirmed the likelihood of a downgrade and cited the influence of US drug companies in Washington.

The source said tariff retaliation would be because Bangkok invoked compulsory licensing of American drugs, which was costing manufacturers profits.

Between late last year and early this year, the government invoked compulsory licensing on some US-made HIV/Aids drugs and an anti-coagulant, sparking annoyance in Washington over the effect on patents and copyright.

Another concern that may lead to a downgrade is the September 19 coup.

But a US Embassy source said Washington was most concerned trading partners satisfied demands for property-rights protection. The source said patent protection was of greater priority than was the military overthrow of the Thaksin Shinawatra government. The source noted there was a coup in 1991, two years before the country was upgraded to watch-list status as a result of improved intellectual-property protections.

The embassy source suggested any downgrade would be a consequence of slow progress in suppressing violations of intellectual-property rights, especially films and optical discs.

Public Health Minister Mongkol na Songkhla reported after a separate meeting with the business council's Daley that corporate America was most concerned about widespread violations of intellectual-property rights, especially films and computer software and games. Mongkol conceded compulsory licensing of pharmaceuticals was relevant.

He said that while his ministry had informed the US of its intentions, "businesses said we should have negotiated with drug companies before imposing compulsory licensing. I have explained our reasons. Everything is in the White Paper", he said.

He added the drug moves were taken to save the lives of patients needing the drugs involved.

He said his ministry was now looking for cheaper leukaemia drugs, citing the requirement of about 10 per cent of the country's sufferers for the treatment called Gleevec made by Novartis. The patented version costs Bt3,600 a day.

Food and Drug Administration secretary-general Siriwat Thiptharadol said it recently asked four drug companies to reduce prices on vital treatments.

MSD (Thailand) makes efavirenz (brand name Sustiva), US-based Abbott Laboratories makes Kaletra, France's Sanofi-Aventis manufacturers Plavix and Novartis holds the patent for Gleevec.
Negotiations will start on May 14, Siriwat said.


Petchanet Pratruangkrai
The Nation

[Butterfly]

The US Embassy in Bangkok is scheduled to hold a news conference later today.

Didn't they get the memo ? This May 1 International Labor Day

[watterinja]

Labor Day

Someone in Labour?

[friscofrankie]

My country 'tis of thee, ever watchful o're the corporate pocketbook.

[Gerbil]

The US Embassy in Bangkok is scheduled to hold a news conference later today.

Didn't they get the memo ? This May 1 International Labor Day

Not a US holiday though (bit too commie for them ), but the embassys get the local ones as well of course.