Global Trends by Martin Khor

Monday 16 January 2005

FTA is a matter of “life and death”

10,000 people protested in Chiang Mai last week as talks took place on a Thai-United States free trade agreement.  AIDS patients, NGOs, senators and the World Health Organisation voiced concerns that the agreement would prevent Thais from having cheaper medicines.  Bilateral FTAs have become a matter of life and death.


Something strange happened in Chiang Mai last week.  A meeting between Thai and United States officials to negotiate a free trade agreement between the two countries had to be shifted out of the hotel because of a massive protest by 10,000 people in the streets outside.

The officials had to leave by the back door and traveled to a golf resort 20 kilometers away to continue their talks.

Street demonstrations are well known at meetings of the World Trade Organisation and the World Bank.  But the Thais who turned up at Chiang Mai last week to show their displeasure even exceeded the number of protestors at last month’s WTO conference in Hong Kong. 

The Thai protests over the Thai-US free trade agreement is of interest to the region.  Malaysia is one of the countries in Asia that are about to enter negotiations for a similar FTA with the US.  It is thus worth knowing what the controversy is all about.

One major issue is that the FTA would prevent patients from having cheaper medicines due to the insistence of the US to alter the Thai patent laws.

Also, many farmers are against the liberalization of food imports which they say will drive them out of business.  Already, Thai farmers selling onions and garlic have lost their business to cheap imports from China after the two countries signed an FTA.

A coalition of Thai organizations representing AIDS patients, consumers, farmers, health activists, human rights groups and other NGOs led the Chiang Mai protests.

Among the protestors were 2,500 HIV-positive people, who saw the FTA as a matter of life and death.  “It is crucial for us to stop the negotiations, because our lives are at stake,” said Nopparat Sa-ngiemjitr, from an HIV/AIDS group.

“We are fighting against drug patenting with our lives. I know I might get arrested or injured in clashes with police, but we are all willing to face that, because we have more to lose if the talks succeed.”

Some senior Thai government negotiators seemed to share the protestors’ views. Kanisson Navanukhro, chief of Thailand's Department of Intellectual Property Rights, who led the Thai team negotiating on patents, said the US conditions put Thailand and Thai drug users in a disadvantaged position .

He said:  "We cannot accept the US demands because their conditions were created only to benefit a developed country which has an advanced pharmaceutical
industry.  Thailand will have nothing to gain because our capacity in producing drugs is very poor."

A World Health Organisation official, William Aldis, agreed in a Bangkok Post article that “it could be a matter of life and death.”   He said that the US had signed similar agreements with other countries that oblige them to tighten their patent laws well beyond internationally agreed standards.

They bargained away reasonable flexibilities and safeguards allowed by the WTO that permit countries to produce or import cheaper versions of essential drugs.

The WHO official added that a recent meeting of world experts organized by the Thai authorities had urged the Thai government not to give up its sovereign right to use these flexibilities.  The meeting suggested that Thailand follow the example of Malaysia and issue compulsory licenses to supply HIV-AIDS drugs.

“The stakes are high for the 600,000 Thais living with HIV/Aids, whose survival depends on availability of affordable drugs,” said Aldis.  The cost of the government’s HIV treatment programme may rise from US$38 million to US$500 million a year within 10 years, as the virus’s resistance to present drugs means they have to be replaced by more expensive new drugs. 

Giving up flexibilities in implementing intellectual property rights “would put at risk the survival of hundreds of thousands of Thai citizens,” concluded the WHO official. 

Parliamentarians have joined the protest movement.  Thai Senator Kraisak Choonhavan plans to sue the Thai Government for violating the Thai Constitution in its conduct of the talks.

Last week, he met with US negotiators in Chiang Mai, then called on the government to reject any chapter in the FTA on intellectual property rights. He said:  “We’re concerned that an FTA will block production of generic drugs, which in turn would definitely lead to higher drug prices.

“The only options for the government now are to pull out of the talks or sell the country down the drain on public health for dubious returns.”

The US proposals would strengthen monopolies on medicines in three ways. Firstly, Drug patent terms would be extended beyond the WTO-required length of 20 years.

Secondly, the FTA would require Thailand to provide five years of “exclusivity” on clinical trial data, meaning that generic drug producers cannot get their products  approved for safety on the basis of the data already provided by the original company, although the products are similar.

This stops generic versions of a medicine from entering the market for five years, even if there is no patent on the medicine. Thai consumers will have to pay the higher prices of medicines of the original companies.  

Third, the FTA would restrict the grounds that the government can use to issue a  compulsory license that enables the supply of generic versions of the patented drugs. 

In the face of the public protests, senior Thai Ministers assured the public that the FTA will not have a negative impact on the people’s access to medicines. But the US is unlikely to sign an FTA which does not include the patent provisions it wants, as the record of previous FTAs show.

Last Friday, the US spokesperson, Neena Moorjani, was asked if the US would agree to a deal that does not include its proposed patent provisions.  “We have not concluded any previous FTAs that did not include these provisions,” she said. “US FTAs maintain the same standards no matter which country we are negotiating with.”

What is happening in Thailand is a lesson for other Asian countries, including Malaysia, that are now in the process of considering a FTA with the US.

Any possible benefits in terms of increased market access for exports to the US market have to weighed against serious repercussions, including increased competition to local producers and especially the impact on access to medicines.

Malaysia has made use of compulsory licensing to import three types of drugs for treating HIV-AIDs patients, resulting in much cheaper medicines made available.  In future, compulsory licensing may also be used to import or manufacture generic medicines needed for all kinds of ailments, including SARS and avian flu.

The possibility of supplying cheaper generic medicines would be considerably compromised through an FTA with the US.

As the Thai NGOs and AIDS patients said in Thailand last week, and as echoed by the WHO official, a decision to enter an FTA with the US involves issues that are a “matter of life and death.”