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FTA: The unstated reason for the watch list

Bangkok Post

FTA: The unstated reason for the watch list

By Deutsche Presse Agentur (dpa) in Bangkok

11 May 2007

The US decision to put Thailand on its "priority watch list" this month was prompted by failed talks on a free trade agreement, as well as the patent-busting of US-made pharmaceuticals, a former US trade official said Friday.

"In recent years there was a growing concern that disrespect for intellectual property was proliferating in Thailand, but I believe the decision was made not to move it to priority watch list previously because there was a feeling that Thailand and the United States would be entering a free trade agreement," said Ashley Wills, a former Assistant United States Trade Representative (USTR).

Thai-US FTA talks fell apart last year, partly over a failure to agree on sensitive clauses concerning intellectual property rights protection in Thailand.

HIV/Aids activists were opposed to the FTA because they feared it would limit access to generic anti-viral drugs.

The question of access to life-saving drugs put Thailand on the USTR’s "priority watch list" for intellectual property rights violations on May 1.

The main reason sited for the change, which could open the kingdom up to retaliatory trade measures such as loss of generalised system of preferences (GSP) privileges, was Thailand’s decision to award compulsory licensing last November on the anti-HIV/Aids medication Efavirenz produced by the US’s Merck Sharp & Dohme and in January on Kaletra, an anti-HIV/Aids drug made by US firm Abbott Laboratories.

"The FTA talks have been suspended and now Thailand has issued compulsory licensing on a product that is very important to the US economy," said Wills, who is now a international business advisor for Washington-based law firm WilmerHale.

Wills arrived in Thailand on Tuesday on a mission to seek a middle ground between the US pharmaceutical giants and Thailand to resolve the growing debate over the use of compulsory licensing to get drug companies to reduce their prices in developing countries for life-endangering diseases.

"I think the Thai government should express its strong support for protecting intellectual property and let it be known that issuing compulsory licensing in not going to become a trend," said Wills.

In fact, it has already become a trend.

Brazil on Friday announced its decision to award compulsory licensing on Efavirenz after Merck Sharp refused to lower the local price to the level the drug is sold for in Thailand.

Merck dropped its price on Efavirenz in Thailand shortly after the government’s compulsory licensing was announced on the drug last November.

"Was it a smart thing for Thailand to do? What precedent does it set?" asked Wills.

For those struggling to provide affordable medicines for HIV/Aids sufferers in Thailand, the reaction has been overwhelmingly favourable.