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Report On Thai - US Free Trade Agreement Focuses On Intellectual Property

In Feburary, research commissioned by American Chamber of Commerce in Bangkok concluded that intellectual property issues are central to upcoming FTA negotiations between Thailand and the US. The Thailand Development Research Institute (TDRI), who is conducting the research, has determined that the high standards of intellectual property rights in the US, the political clout of US pharmaceutical and entertainment businesses, and US technological capabilities are issues Thailand should give particular attention to. The group believes that while the model for the FTA is expected to be the US-Singapore FTA, as a developing country Thailand should make special considerations to prevent potential monopolies, allow for the production of generic pharmaceuticals for Thailand's poor, and not inhibit inventiveness through excessively long copyright lengths. Ultimately the research concludes that Thailand should postpone the enforcement of the intellectual property aspect of a Free Trade Agreement for up to a decade, so that Thailand could ease into the requirements that would be necessary. Furthermore, as a developing country, Thailand is recommended to reject the 1991 International Convention for the Protection of New Varieties of Plants (UPOV) as Thailand's standards of plant novelty are not yet achievable. In addition to intellectual property, TDRI cites investment and access to the services sector as the other top priorities.

US-Thailand Free Trade Agreement Talks Scheduled For June

Following reports to the US Congress outlining the goals of a bilateral FTA, the Bush administration has sent word to Bangkok that it would like to begin discussions on June 21. While various interest groups within Thailand express their concerns about the ramifications of an FTA, Thai governmental officials state that the June meetings will simply discuss what subjects will be discussed in further meetings and what schedule they will follow. U.S. government Trade Representative Robert Zoellick argued before Congress that an FTA agreement would benefit US agricultural and services sectors as well as help enforcement of intellectual property rights in Thailand. In Thailand, where concerns of the actual benefits and costs are being expressed by a variety of groups, industries have legitimate concerns for the particulars of the agreement. Many claim that if the US-Thai FTA is modeled on the US-Singapore FTA it will in fact be injurious to many businesses. Legislators are also voicing their concerns early as ratification of agreements such as FTAs do not need to be endorsed by a legislative authority.

US International Trade Commission Rules Against Thai Shrimp Exporters

The US International Trade Commission ruled in late Feburary 2004 that Thai shrimp exporters may be subject to punitive tariffs for selling shrimp in the US at below market prices. The Commission ruled that low priced shrimp from Thailand and five other countries were hurting US shrimpers. Four Thai shrimp exporters were named, not the entire industry, so the Thai government will not be involved in the challenge to the ruling. On June 8 the commission's preliminary findings will be made public, outlining the exact punitive measures against Thai shrimp exporters. Any measures the US wishes to impose will be enforcable for shipments made after March 5, 2004

Tax Rates Scheduled To Increase On Idle Land

In March of this year the government stated that beginning in 2005, new land taxes will apply to landowners who leave their land idle. Unused land will be taxed at twice the rate as land in use. Land that has been idle for more than five years will be subject to even greater tax rates. In particular, the new law has increased tax rates for land without structures as well as land housing condominiums. Specific rates will be set by local administrative organizations, which are also responsible for collecting the taxes. The government claims that the new rates, capped at 0.1% of the land valuation price, will promote the use of land as well as boost revenues of the local agencies, an expected fourfold increase from the previous rates established in 1965.

Central Bank Aims To Facilitate Debt Write-Offs

With the economy growing at a steady rate, authorities at the Bank of Thailand are promoting firm action against delinquent borrowers and expedited restructuring of debts by Thai financial institutions. Although the percentage of total loans considered bad loans had declined to 12.7%, officials at the Corporate Debt Restructuring Advisory Group are hoping to push this number down further. Initiated in March of this year, one major plan involves stricter provisioning requirements on banks to pressure them to take preventative action against restructured loans so they do not go into default again. Mediation services by the Bank of Thailand have been proposed to expedite restructuring of loans tied up in the courts. Also, a legal amendment may be created to allow Asset Management Corp, a state owned organization, to purchase debt ridden assets in an effort to facilitate restructuring their debt.. In the mean time, the central bank has encouraged local banks and financial institutions to determine, by July 2004, if their current restructured loans were elegible for re-classification from non-performing loan status.

Money Laundering Offenses Expanded

Seven new criminal offenses may be included under the anti-money laundering law if the Council of State and the parliament approve of the draft amendment deemed acceptable by the cabinet in early March 2004. The new offenses are gambling, illegal trading in war weapons, intellectual property rights violations, human trafficking, exploitation of natural resources and the environment, illegal currency trading, and price collusion in bidding for state projects. These seven offenses would be in addition to the existing anti-laundering offenses that include drugs, terrorism, prostitution, corruption, fraud, extortion, customs duty evasion, racketeering by organized crime, and malfeasance. The amendment, if ratified, would also expand the definition of the term "assets instrumental in money laundering" to include equipment, machinery, or any other device used to procure illegal revenue. Also, assets seized in criminal money laundering operations would be appraised and no less than half of the value of those assets would be directed into an anti-money laundering fund.

US Companies Form Alliance To Represent Business Interests In FTA Negotiations

Over 100 U.S. businesses, including General Electric, Time Warner, and Unocal, have banded together to represent American business interests in the upcoming US-Thailand Free Trade Agreement negotiations. The group, the US-Thailand Free Trade Agreement Business Coaltiion, was introduced in Washington DC by US Trade Representative Robert Zoellick and Thai Commerce Minister Watana Munagsook on March 23. The American business coalition believes the agreement will be beneficial to both countries. In addition, a spokesman for the group argues, a successfully implemented agreement could be a model for FTA negotiations with other Southeast Asian nations including the Philippines, Indonesia, and Malaysia. The Thai Commerce Minister acknowledged there were certain industries from both nations that wished to be left out of the agreement, but urged the US to resist pressure from those industries that wish to be excluded.

BoI May Ease Restrictions For Hiring Foreign IT Specialists

Despite recent efforts to attract more foreign IT experts Thai corporations are continuing to experience a shortage of qualified IT employees. In order to remedy this, as of March 2004, the Board of Investment, in cooperation with the Information and Communications Ministry, was considering measures that would make it easier for corporations to procure foreign IT employees. The BoI hopes to establish guidelines for screening foreign IT experts so that positions in great demand can be filled the most expeditiously. The aim of the initiative is to stimulate the Thai IT sector which is seen as lagging behind those of other Asian nations. The BoI is also planning on luring foreign investors, especially Western multinational corporations, to expand their outsourcing operations in Thailand through incentive packages. The BoI recognizes that current incentive packages by Taiwan, Malaysia, and Singapore are much more attractive to foreign investors, and it hopes to increase Thailand's competitiveness with these and other nations.