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TWN Info Service on WTO and Trade Issues (Jan07/07)

30 January 2007


Thai Human Rights Commission attacks FTA with US

The free trade agreement that Thailand has been negotiating with the United States will violate the human rights of Thai people and affect the country's sovereignty; thus negotiations should not resume until a thorough review of its impact is undertaken.

This was the conclusion of a draft report of the National Human Rights Commission of Thailand.

The draft report was presented for discussion at a seminar on 17-19 January in Bangkok.

Te report is believed to be the first-ever human rights impact assessment of a US free trade agreement (FTA) conducted at national level.

Below is a detailed article on the report.

With best wishes
Martin Khor
TWN

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Thai Human Rights Commission attacks FTA with US

By Sanya Smith (TWN), Kuala Lumpur, 24 Jan 2007

The free trade agreement that Thailand has been negotiating with the United States will violate the human rights of Thai people and affect the country's sovereignty; thus negotiations should not resume until a thorough review of its impact is undertaken.

This was the conclusion of a draft report of the National Human Rights Commission of Thailand, a body established by the Thai Constitution. The 11 members of the Commission, chaired by Professor Saneh Chamarik, were elected by the Thai Senate.

The draft report was presented for discussion at a seminar on "Free Trade Agreements: Impact on Human Rights" on 17-19 January in Bangkok, organized by the Commission in partnership with several United Nations agencies. It was attended by 150 human rights experts, policy makers and NGO leaders.

The report is believed to be the first-ever human rights impact assessment of a US free trade agreement (FTA) conducted at national level. An international human rights expert attending the seminar commented that it could serve as a model for similar assessments in other countries.

The negotiations for a Thai-US FTA are currently on hold. According to Assistant US Trade Representative Barbara Weisel, "Negotiations with Thailand have been suspended. We have said publicly that we would be interested in renewing negotiations with Thailand when a democratic government is in place."

The Commission based its findings on a human rights assessment of a leaked text of the intellectual property chapter proposed by the US as well as on other chapters of the FTA based on the texts of other bilateral deals signed by the US.

Among those interviewed by the Commission were the Chairman of the committee formulating FTA strategies and the head of the negotiating team.

The Commission studied possible human rights violations in the following areas: agriculture, environment, intellectual property, services and investment and their impact on the right to development, socioeconomic and cultural rights, community rights, the right to access resource bases, the right to access drugs and public health services. All these rights are guaranteed and protected under the 1997 Thai Constitution.

The report noted that "the results of the FTA negotiations may lead to significant changes in the development strategies and the people's way of life and impact options for development."

The Commission found that existing USFTAs have obliged the countries signing them to "accept the US demands that are of a uniform standard with respect to intellectual property, investment liberalization, the environment, etc., all of which have impacted people's livelihood and national sovereignty."

The Commission also pointed out the lack of disclosure to the public and failure to allow the public or the Thai Parliament to participate.

In its strongest criticism of the FTA negotiations, the Commission's draft report said: "The fact that Thailand is on the receiving end with the United States unilaterally making a 'take it or leave it' proposal, any negotiation could not possibly be conducted on equal footing. This is inconsistent with the principle of negotiations between two states of equally recognized and respected sovereignty in the world community.

"Thus, accepting all the terms and conditions imposed by the United States would amount to recognizing the US sovereignty over our own, i. e., recognizing or acting in compliance with US laws when they are inconsistent with Thai laws, e. g., the Patent Law."

It added that being compelled to change a number of Thai laws to be compatible with the US law "will amount to Thailand's administrative, legislative and judicial sovereignty being violated indirectly. Thai courts will also have to indirectly enforce the US law."

The Commission found that "an FTA is like a tsunami that crashes to the shore without warning when one is not prepared to deal with it." It goes on to note that both the Thai Government and its entrepreneurs are not sufficiently prepared.

The Commission highlighted that tariffs on agricultural, forestry, fishery and processed food products were higher in Thailand than in the US, and the elimination of tariffs on both sides would cause Thailand to have to reduce its tariffs by much more than the US.

It also expressed concern that as long as the US continues its farm subsidies, Thai products will still have difficulty competing. Speaking at the Bangkok seminar, Mr. Felipe Frydman, the Argentine Ambassador to Thailand, said that in Mercosur's USFTA negotiations as part of the Free Trade Area of the Americas (FTAA), the US refused to negotiate the reduction of its agricultural subsidies, saying that it could only be done at the WTO.

Mr. Frydman explained that the US refusal to commit to reforms of its antidumping law in negotiations with Mercosur, together with its refusal to lower its agricultural subsidies, were the reasons Mercosur refused to put government procurement, services and intellectual property on the table in the FTAA.

The Commission noted with concern the experience of Mexican corn farmers under the North American Free Trade Agreement (NAFTA) who went bankrupt because they could not compete with the heavily subsidised US farmers. (According to recent reports, 2 million Mexican farmers have lost their livelihoods due to cheap imports).

The Commission stated that "negative consequences may be inevitable" especially for Thai farmers of products also grown in the US, for example, soya beans, maize, potato, peanuts, cows and pigs. These Thai farmers "may be forced to abandon farming and seek new occupations elsewhere, for they will not be able to compete with the cheaper farm products imported from the United States."

With respect to the environment chapter of the proposed USFTA, some of the negative impacts that the Commission highlighted were that stronger environmental protection may make it harder for Thai manufacturers to compete and that the US may use the environmental provisions as "a pretext to justify its decision to legally impose protectionist measures."

The Commission noted that simultaneously, the US demands in other USFTA chapters such as for stronger investment and intellectual property protection "may prevent Thailand from acting in full compliance with the obligations specified in the multilateral environment agreements to which Thailand is a party if they are considered inconsistent with any conditions or provisions in the FTA".

In particular, "If the environmental protection measures are enforced on foreign investors, they will be interpreted as indirect seizure of property. Action may then be taken against the government and such measures may be prohibited." The Commission goes on to state that "This may place Thailand in a vulnerable position, likely to be charged with violation or failure to honour the commitments under international laws to which Thailand is a party".

In its investigation of the intellectual property chapter, the Commission focused on its impact on public health and farmers' rights. The Commission charted the history of US pressure on Thailand to increase its intellectual property protection and the protests against such a move by academics, public health officials and NGOs.

The report also explains demands made by the US that go beyond the WTO's TRIPS Agreement. These TRIPS-plus provisions include: the patenting of plants, animals and methods of treatment; patent term extensions beyond the 20 years required by TRIPS; data exclusivity; linkage of patent status and medicine registration; prohibition on patent pre-grant opposition; and limitations on the use of compulsory licences. These last two have been recently successfully used in Thailand to ensure access to medicines used to treat AIDS.

The Commission highlighted research that showed that in Thailand the price of branded/originator medicines can be ten times higher than the generic version. It concluded: "The impact on the market monopoly will be that the costs of drugs will be too expensive or beyond the purchasing power of people.

"On top of this, the estimated increase of expenses over 100,000 million Baht, more than the annual budget for public health, will definitely undermine any earnest attempt to manage the health system in Thailand, particularly the health insurance scheme... In the final analysis, the people in Thailand will be denied access to drugs, causing endless public health and social problems."

Strongly attacking the US demands on intellectual property, the Commission said that they "clearly reflect the greed on part of pharmaceutical corporations expressed through the strong position taken by the US negotiation team, which tried in every possible way to gain the most from it..."

"Doing so would amount to undermining the universal health care system and popular health insurance scheme and destroying the chances for Thailand to develop its own potentials in this pharmaceutical field and to be self-reliant in manufacturing and distribution of quality pharmaceutical products at reasonable price."

The report notes that the provision to expand the scope of patent protection to cover all categories of living organisms will be an important US demand. Implementing this would require amendments to the Thai Patent Act and its sui generis Plant Varieties Protection Act which was designed to suit Thailand's socioeconomic conditions.

Accepting these US demands would "affect farmers' access to plant and animal varieties because prices may increase under the restrictions and prohibitions of the patent law system," stated the report.

In addition, the US' demands that Thailand sign the 1991 International Convention for the Protection of New Varieties of Plants (UPOV) will lead "to unfairness in the exploitation of Thai plant varieties and will impact farmers' rights, and pose barriers to conservation and the sustainable exploitation of biological resources," says the Commission.

It added that provisions that prohibit farmers from collecting the seeds of patented plant varieties for use in the next farming season or from exchanging plant varieties with neighbours or other communities for the purpose of selection for breeding are all "contrary to well established Thai tradition."

The report said that if Thailand has to implement the animal and plant patent system or protection of plant varieties under the UPOV in compliance with US demands, it will jeopardize Thailand's economic rights and the rights of future plant and animal development. Thailand would also not be able to implement the requirements of the Convention on Biological Diversity as these would be inconsistent with provisions concerning the protection of patents of living organisms.

As regards the services chapter, the Commission noted that due to the negative list system in USFTAs (whereby everything is liberalized unless it is listed) and their MFN provisions in the services chapters, unless Thailand lists it as an exception, the GATS- plus liberalisation it has done, for example, in the ASEAN framework, will have to be extended to the US. It concludes that "Hence, caution should be taken on this issue as well."

The Commission had a number of concerns with respect to the standard USFTA investment chapter. These included the broad definition of investment and investor, pre- establishment rights, free transfer of capital, expropriation, prohibited performance requirements, and investor-state dispute settlement.

Among the Commission's many recommendations in the report are that:

-- All sectors of society should be involved in the negotiating process and the matter must go through Parliament.

-- Thailand should delay the negotiations for the time being to be able to carefully scrutinize important issues. FTA negotiations with every country should be suspended for a one-year period during the administration of the current temporary government, because the negotiations and the signing of FTAs will be legally binding on Thailand in the long term.

-- On matters relating to medicines and public health services, the government must adhere to the principles of the rights of patients and consumers, and self-reliance in terms of drugs and public health. If the US demands impact on health condition and access to drugs and public health services, they must be rejected without being compared to benefits offered by the US.

-- As every person has fundamental rights to good health, the issue of IPR protection relating to drugs and public health services should not be considered in the bilateral trade negotiations. This can be compared with the US not agreeing to include its agricultural subsidies on the agenda.

-- Thailand should not accept the US demands on the issue of plant and animal protection under the patent system but insist on WTO members' rights to deny patent protection for plants and animals. There is also no need to cover plant variety protection under the UPOV Convention or the patent system.

-- Thailand should review the definition of the broad scope of investment protection, which includes intellectual protection. Services markets should be opened only in sectors where competition is beneficial to the country.

-- The draft text of the FTAs and the substance of the negotiations should be disclosed. Any negotiations should be considered from the perspective of all parts of Thai society and not just some economic sectors.

-- The government should establish an independent committee to review Thailand's FTA policies. It should consider the impacts of FTAs already signed by Thailand and study negotiations that are in progress. The appraisal should cover economic, social, cultural and environmental dimensions. Public hearings should be organized.

-- The government should expedite the passing of the International Agreement Negotiations Act to be used as a legal framework in future negotiations. It should cover negotiation procedures, components of the negotiating team, democratic and parliamentary participation, review of pre-negotiation preparations, plans for production restructuring, plans to cope with the impacts of FTAs, public hearings and an impact assessment to be approved by the Parliament prior to negotiations, and FTAs are required to be approved by the Parliament before signing.

-- The Constitution should be amended by stipulating that a public hearing be held and every person has the right to vote on the signing of an international trade agreement or an international treaty which will impact the country.

 


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