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Strain in US-Thai relations over drug row

Updated On: May 25, 2007

While the hijacking of democracy by the September 19, 2006 coup did not break US-Thai ties, the ongoing drug row between both countries has soured the relationship.

According to the Bangkok Post, the Thai government’s “attempt to mend fences with the United States over the compulsory licensing (CL) of AIDS and heart drugs has been fruitless. Washington has refused support for the policy, which Bangkok insists does not violate World Trade Organisation (WTO) rules”. Public Health Minister Mongkol na Songkhla publicly announced after the Monday meeting in Washington with the US Trade Representative (USTR), Commerce Department as well as some senators, “In conclusion, the trip [is] fruitless.”

Mongkol and senior executives from the Public Health, Commerce and Foreign Affairs ministries had gone to the US for meetings on May 21 and 22 to explainThailand's policy on compulsory licences for the import and production of generic versions of AIDS drugs Efavirenz and Kaletra and heart drug Plavix”. Thailandfirmly endorses “a policy to give wider access to life-saving medicines for people who cannot afford expensive drugs. [Mongkol] says it is allowed by the WTO's Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)”. Unsurprisingly, this has caused consternation among “transnational pharmaceutical firms holding the patents for the original drugs” who hold that Thailand is acting unfairly.

Mongkol complained of the aggressive US stance, saying that “his discussion with US Commerce Secretary Carlos Gutierrez” was “'totally negative”. He added, “[Gutierrez] obviously represents the drug companies. There was no sign of friendship left when he started talking.” Apparently Gutierrez had said “it was not the responsibility of drug companies to absorb the burden of the Thai healthcare system”.

Thailand is sticking to its guns. According to the Nation, Mongkol declared, “From now on, the Commerce, Foreign Affairs and Public Health ministries will go ahead with the CL process.”

The rest of Thailand seems to support the national position. A commentary in Bangkok Post said held that “branding Thailand as an intellectual property pirate and counterfeit drugs market” was “big lies”, hence it “is high time for people, not only in Thailand but around the world, to rise up in resistance, to break free from fear, and to oppose holding human lives hostage to the profits of private companies”.

Now it seems that Thailand is the whipping boy of the US though the latter is strenuously maintaining that it continues good relations with Thailand.

US Assistant Secretary of State for East Asian and Pacific Affairs Christopher Hill lauded Thailand’s plans to “hold a referendum on the constitution and general elections by the end of this year”. However he evaded “a question about a move in Congress to compel the US president to end Thailand's status as a major non-Nato ally”, the Bangkok Post noted. Hill reiterated that that Thailand had been a “very good friend, a very good partner and a very old treaty ally” despite outstanding concerns. 

Just this week the US embassy in Bangkok Wednesday stressed that the “downgrade of Thailand's trade status was not a result of the Public Health Ministry's move to enforce compulsory licensing”. US Ambassador Ralph Boyce met with Thai Commerce Minister Krirkkrai Jirapaet to discuss issues such as “the recent downgrade Thailand's trade status to priority watch list, the imposing compulsory licensing enforcement, and the progression of the Foreign Business Act amendment”. However, the US “will not impose any retaliation measures against Thailand's compulsory licensing”. Hence, “the downgrading will not affect the revision of the Generalised Systems of Preferences (GSP) on Thai export goods”.

It is uncertain how this will impact the Thai economy which has recently seen its fourth interest rate cut by the central bank this year. According to Bloomberg, the “Bank of Thailand has lowered its one-day bond repurchase rate to 3.5 percent from 4 percent to revive spending by consumers and businesses whose confidence is near a five-year low”. (24 May 07)

Sources:

Rates have bottomed out – BOT (Nation, 24 May 2007)

Breaking the vicious cycle of fear (Bangkok Post, 24 May 2007)

Moves in the US against Thailand (Bangkok Post, 24 May 2007)

Thailand's trade status downgrade not related to CL: US ambassador (Nation, 24 May 2007)

Mongkol fails in bid to mend fences with US(Bangkok Post, 23 May 2007)

US points to Thailand as terrorist draw card (Bangkok Post, 23 May 2007)

Hill: Govt. should stick to deadlines Bangkok Post, 23 May 2007)

Thailand fails to win over U.S. on drug patents (Reuters, 23 May 2007)

Lonely Thailand (Bangkok Post, 23 May 2007)

Thai Central Bank Cuts Rate for Fourth Time This Year (Update8) (Bloomberg, 23 May 2007)

Day Two in DC: Compulsory Licensing clarifications make much progress (TNA, 23 May 2007)

Drop drug policy, US tells Thais (Nation, 23 May 2007)