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Warangkana Rattanarat / Kepa
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Trading off with EU – Chicken or medicine?

Intellectual property rights are a hot issue under EU – Thailand Free Trade Agreement FTA.
Warangkana Rattanarat
3.12.2012

The visit to Thailand of the European Commission representative – Deputy Director General for Trade on 29th November sent an alarming message to Thai public.

There is a great worry that the key agenda in the meeting between the EU representative and the Thai Deputy Prime Minister focused on the issue of intellectual property rights (IPR), which is one of the most critical subjects in this trade deal. Thai health concern groups and the FTA watchdog held campaign saying "EU, hands off from our medicines and stop trading our lives". They said the FTA would have immense impacts on Thailand, especially on health.

EU launched the FTA negotiation with ASEAN countries in 2007 under the EU-ASEAN format or between region to region. However, as the process went slow and claiming a concern over issue of human rights in Myanmar, EU decided to change the talks to bilateral negotiations with selected countries, one of them Thailand.

With one to one talks, it seems that EU can speed up the process and has more muscle for pressuring. For Thailand, the key factor pushing the country to go ahead with this trade negotiation came from the EU Parliament’s decision in June 2012 to cease the tariff privileges under the Generalized System of Preference (GSP) for Thailand by 2014 because the country has achieved the upper middle income level. Thai government and business sector, especially chicken and shrimp exporters, have expressed their worry that the industries would be heavily affected if they have to bear the cost of a much higher tariff rate.

To compensate the ending of the trade privileges, business sector is demanding the government to hold fast track negotiation with EU and hope that the FTA will be linked in 2015 for the smooth transition from GSP to the FTA regime. Further, there is a fear that Thailand will miss this EU FTA train as similar negations have undergone with other ASEAN countries.

However, for the sake of exportation of chicken and shrimp to EU, Thailand might have to sacrify their health system and Thai people's health as the EU FTA package includes the ask for aggressive protections on intellectual property rights (IPRs), which are far beyond the TRIPS (Trade-related aspects of intellectual property rights) agreement under the WTO. This is called TRIP Plus provision, which includes data exclusivity or prevention to get access to test data of the drug, the extension of drug patent protection periods from 20 years to 25 years, and stricter intellectual property protection enforcement.

This means patent owners, which are big pharmaceutical companies, will have longer period to control market of expensive patented medicines, while on the other hand prevent and delay possibility of production of the drugs by local and smaller pharmaceutical companies, which will help reducing prices of the medicines in market. As a result, millions of Thais in need would not get access to affordable life-saving medicines. Thailand currently has to import almost 70 per cent of drugs. If there are more drugs in the world market to be patented, it will affect to overall increase of medicine prices in Thailand.

HIV-AIDS patients are major drug users in Thailand, who will be affected directly from the EU FTA as their lives depend on medicines, most of which are patented. Currently, there are around half a million Thais, who are HIV/AIDS positive. Thanks to the possibility allowing The Government Pharmaceutical Organization (GPO) Thailand to produce combined generic medicines, people living with HIV in Thailand can use these medicines to prolong their lives. In comparison, patented drugs can be 2-10 times more expensive. And if we calculate the cost per day, a HIV/AIDS patient has to pay for generic drugs only 40-448 baht or 1-11.2 euros, while in case of patented ones the price will be 252-791 baht or 6.3-19.8 Euros a day.

The new minimum wage in Thailand to be announced next year is 300 baht or 7.5 euros per day, meaning that the price of patented drugs is much higher than what people earn a day. Accessing to virus killing medicines can allow people living with HIV-Aids to live longer and be able to work and live as other people. However, if they can not get access to the medicines, most likely the patient will die within a few years.

There is also a lesson to learn from Columbia, a country that signed FTA with EU. After 10 years of applying the Data Exclusivity, the country expenditure on medicine has increased 340 million US dollar a year.

Several international institutions on development and public health such as World Health Organization (WHO), United Nations AIDS (UNAIDs) and United Nations Conference on Trade and Development (UNCTAD) has issued a Briefing Paper recommending developing countries to avoid making any international agreement on IPRs going beyond the WTO TRIPS agreement, especially the provision of Data Exclusivity.

Losing some for gaining some is always the rule of free trade agreement or even a fact of live. It is fair enough to think that this is a nature of trading or exchanging. However, is it still fair and acceptable if our lives and our health are supposed to be traded or sacrified on the table of free tree negotiations? A heavy question not just for Thailand, but everyone involved.

Following is the open letter to the Deputy Director General for Trade of the European Commission

Dear Mr. João Aguiar Machado,

Deputy Director General for Trade of the European Commission

Civil society groups in Thailand wish to congratulate the European Union on being awarded this year’s Nobel Prize for Peace. This is indeed a great honour that should obligate the awardee to the highest levels of responsible conduct.

The conduct of the EU in pressuring various developing countries around the world to comply with its conditions and requirements in free trade negotiations, however, seems contrary to this expectation. The stricter regime of intellectual property rights protection that goes beyond WTO rules can only be interpreted as the pursuance of maximum profit for transnational corporations of the EU as the priority agenda. Data exclusivity requirements and border measures can only result in the destruction of local pharmaceutical industries. The ratification of the International Convention for the Protection of New Varieties of Plants (UPOV) and the Budapest Treaty would keep patented seed prices high and out of reach of small farmers. The investment protection regime that allows foreign investors to sue governments for policies that infringe on their profits could constrain a government’s ability to safeguard its people’s right to health and to protect the environment. Deregulation with respect to alcoholic drinks and cigarettes would also be detrimental to the well-being of the population.

Consequently, we, as representatives of Thai civil society, demand that EU trade negotiators eliminate the above mentioned issues from the agenda of negotiations with Thailand and other developing countries.

In doing so, EU would demonstrate to the world its integrity as a truly deserving awardee of the Nobel Prize for Peace.