Fighting the US-Thailand Free Trade Agreement

Every time I visit Bangkok I see it. "Power is nothing without control" reads an advertising billboard for a transnational tyre company near Chulalongkorn University. This February, Pirelli’s slogan summed up the US philosophy for its proposed bilateral free trade and investment agreement with Thailand.

On 12 February, US Trade Representative Robert Zoellick sent a formal letter of intent to begin negotiations on a Free Trade Agreement (FTA) with Thailand within 90 days to US Congress and Senate. Actual negotiations seem likely to start in June, but just days ago, Thai Commerce Minister Watana Muangsook led a large official delegation to Washington to meet with US politicians and trade negotiators in order to prepare the ground for FTA talks.

A US-Thailand Agreement, modelled on recently-signed FTAs with Singapore and Chile would advance the US Enterprise for ASEAN (Association of South East Asian Nations) Initiative (EAI). This envisages a network of bilateral FTAs between the US and individual ASEAN countries that are committed to domestic neoliberal reforms and free trade and investment. Not to mention the “war on terror”.

While Thaksin’s government promotes Thailand, through its agricultural/food production and exports, as “kitchen of the world”, Australian National University academics Peter Drahos and John Braithwaite warn: “Bilateralism is like cooking an elephant and rabbit stew. However you mix the ingredients, it ends up tasting like elephant.”

It is clear what the elephant wants from this relationship.

The Secretariat of the recently formed US-Thailand FTA Business Coalition comprises the US-ASEAN Business Council, representing US corporations with interests in ASEAN, and National Association of Manufacturers (NAM), the USA’s largest industrial trade lobby group. NAM boasts: “Our voice is not compromised by non-industry interests.”

FedEx, General Electric Company, New York Life, Time Warner and Unocal are US-Thailand FTA Business Coalition corporate chairs. Steering Committee members include: AIG, Cargill, Caterpillar, Citigroup, Corn Refiners Association, CSI, Dow Chemical, Ford, National Pork Producers Council, PhRMA, PricewaterhouseCoopers, SIA, UPS, and the US Chamber of Commerce.

The US Chamber of Commerce wants “a comprehensive FTA with Thailand” to address “contentious trade issues” like intellectual property protection, customs administration and “permit market access for U.S. firms into certain restricted Thai industries, such as telecommunications and financial services.” The US wants the Thai government to crack down on “intellectual property violations”, not least, counterfeit software, clothes, and auto parts.

Liberalizing Thailand’s agriculture sector is another top US priority. Ernest Bower, President of the US-ASEAN Business Council and former McDonnell Douglas executive, believes:

“a US-Thai pact could form "the precedent and the template" for future FTA talks with Southeast Asian countries having large farm sectors.” A White House factsheet notes: “An FTA would particularly benefit American farmers, who currently face tariffs in Thailand averaging 35 percent in addition to an array [of] non-tariff barriers.”

The US also wants greater “transparency” and expanded access for US goods and services to Thailand’s government procurement market.

Then there is investment. To qualify for an FTA with the US, Thailand signed a Trade and Investment Framework Agreement in October 2002. Under the 1966 Treaty of Amity and Economic Relations, US businesses already enjoy equal treatment to Thai firms in many sectors of the economy, with a few exceptions. These existing privileges will be greatly expanded – especially in the services sector - and phased into the FTA.

Zoellick wants Thailand to eliminate “unjustified trade restrictions that affect new US technologies” in agriculture. A ban on the import of genetically-engineered (GE) seeds for commercial planting has been in place since 1999, and in April 2001 the Thai government decided to stop GE field trials, including Monsanto’s ongoing cotton and corn experiments. Last November, Monsanto announced that it wanted to make Thailand its regional base for GE Round Up Ready corn and bt corn by 2006, urging that the government lift its ban.

While the US heavies Thailand over its GE ban, pirated goods and sundry intellectual property violations, many Thais wonder who the real pirates are. Attempts to patent Thailand’s fragrant jasmine rice have met with outrage and stiff opposition from farmers and others concerned at the apparent ease with which Thai biodiversity and traditional knowledge is being appropriated by others. The FTA would require Thailand to allow patents on animals and plants, further facilitating biopiracy by US companies and researchers.

US corporations and officials applaud Thaksin’s privatization program, viewing the FTA as a means to advance and lock this in. But popular opposition, led by tens of thousands of state enterprise workers rallying regularly, caused Thaksin to postpone the privatization of the Electricity Generating Authority of Thailand (EGAT). This may also delay provincial and metro electricity authorities’ privatization plans. The state enterprise workers’ union warns that privatization will mean higher rates and overseas ownership.

Advisers on the EGAT sale include Morgan Stanley, Citigroup and JP Morgan Chase and Co. Planned sales of other state-owned enterprises include the Metropolitan Waterworks Authority, Provincial Waterworks Authority, the Government Pharmaceutical Organization, the Port Authority of Thailand, the Expressway and Rapid Transit Authority of Thailand. The FTA also threatens the subsidized pricing practice of state enterprises in transport, electricity, drugs and fuel.

We can be sure that the US will not offer tariff-free or quota-free access to any major Thai farm exports. Conversely, Thai farmers would face a further flood of subsidized US agricultural imports once tariffs are eliminated, threatening both their livelihoods and food sovereignty. This could lead to contamination by genetically-modified US crops and seed as has happened in Mexico under NAFTA. Many Thai critics of the US FTA point to the dramatic impact of the first phase of an FTA with China which took effect last October. With the removal of many agricultural tariffs, a flood of cheap Chinese fruits and vegetables threatens to ruin many Thai farmers in the rural north.

Organized by FTAWatch (www.ftawatch.org), a coalition of Thai organizations and academics against the FTA, the packed forum at Chulalongkorn where I spoke last month was entitled “Sovereignty Not for Sale”. “Sovereignty” resonates strongly in the only South East Asian country to escape physical occupation by European colonial powers. Thai law generally prevents foreign individuals or companies from owning land. The realization that the FTA could remove these restrictions is anathema to many Thais.

At the February forum, Camila Montecinos, of GRAIN-Chile described the US approach on bilateral FTAs as the imposition of a blueprint rather than a genuine negotiation: “it is not really an FTA, but a Charter of Guarantees for US investments and investors.”

Even the mere expectation of a gain or profit, or the assumption of risk is covered in the definition of investment and therefore subject to a possible investor-state dispute brought against the government by an aggrieved US investor. An “investor” would not need to be an actual investor in order to launch such a dispute but could merely be one that intends to invest. She pointed out that the US FTA template’s “transparency” provisions grant US investors and enterprises information and lobbying rights that nationals do not have – governments have to inform them before passing new laws or regulations, or applying certain policies, and allow them to lobby against them.

Dr Jakkrit Kuanpoth, of Sukhothai Thammathirat Open University’s School of Law explained that the FTA would restrict even narrow options available to the Thai government under the WTO’s TRIPs (Agreement on Trade-Related aspects of Intellectual Property rights). It would extend the 20 year patent term by a further 5 years, and limit the circumstances for issuing compulsory licences, (which authorize private or state use of patents without the consent of patent holders) and prevent the revocation of patents on public interest grounds.

This “TRIPs-plus” approach would increase social and economic costs and exacerbate the public health crisis, while making Thailand’s self-sufficiency in technology impossible. Around a million people live with HIV/AIDS in Thailand. According to a 2002 UNAIDS report AIDS is Thailand’s leading cause of death. The Thai Government Pharmaceutical Organization produces cheap reliable generic drugs including one of the cheapest anti-retroviral drugs in the world, GPO-VIR, which the government hopes will reach 70,000 people this year who otherwise would not afford treatment. Under the FTA, Thais can wave goodbye to hopes of accessible treatment.

The US-Thailand FTA is another example of neoliberalism and US military/geopolitical interests advancing hand in hand. Zoellick argues that the FTA “would further enhance our broader relationship with Thailand. We are partners in the global war on terrorism, and the extensive ties between the US and Thai militaries bolster US strategic interests in the region.”

Thaksin’s government sent troops to Iraq, and captured Jemaah Islamiah militant Hambali, accused of masterminding and plotting terrorist activities, delivering him to US authorities. Domestically it continues to marginalize, militarize, and criminalize the mainly Muslim south which John Brandon of the International Herald Tribune (February 10 2004) sensationally labels “Southeast Asia's soft underbelly” of “terror”.

Over a century after Siam annexed the Islamic Kingdom of Pattani in 1902, resentment of the government’s neglect of the country’s South - one of the country’s poorest regions - and its refusal to recognize the culture, language, and ethnicity of some six million Thai Muslims remains high. With a wave of attacks on government buildings and military bases, the heavily militarized, predominantly Muslim, provinces of Yala, Pattani, and Narathiwat near the Malaysian border are now under martial law. As unrest continues, so too do reports of human rights violations carried out by state security forces.

This April/May, Thailand hosts the 23rd annual “Cobra Gold” joint military exercise, involving US and Thai troops (and soldiers from Singapore, Mongolia and the Philippines). It remains the region’s largest joint military exercise involving US troops.

One can understand why Thaksin is a willing ally of Bush. A former Lieutenant-Colonel in the Thai Police, he became a multimillionaire telecommunications tycoon. He is the self-styled CEO of “Thailand, Inc”, and Top Cop. A division of his Shin Corp. media and telecommunications empire, Advanced Info Service, has the largest cellphone customer base in Thailand. He also owns iTV, Thailand’s largest commercial broadcaster. “Democracy is the means to an end," he says, "not the end itself." Thaksin consolidated his power base by filling key government and military posts with family and associates from Shin Corp. But with fallout over a government cover-up of the Asian bird flu outbreak, the situation in the South, and mounting opposition against privatization, his popularity is plummetting.

Thaksin’s party commands an absolute majority in Thailand’s lower house, and can pass a trade agreement merely on a yes/no vote with a joint meeting of Senate and the lower house. A number of academics, NGOs, senators and the opposition have challenged the anti-democratic and secretive process of negotiating and signing FTAs. Chulalongkorn Law Professor and FTAWatch member Jaroen Compeerapap argues that Thailand’s Constitution requires any deals affecting Thai sovereignty to be approved by two-thirds of Parliament. But Thaksin maintains that this FTA and others would not be subject to Parliamentary scrutiny. Thailand has concluded, or is pursuing bilateral FTAs with Australia, China, India, Bahrain, Peru and Japan. Thongbai Thongpao, human rights lawyer and senator, writing in the Bangkok Post (22 February 2004), asks: “If the government has nothing to hide, why don't they l

The FTA is Cobra Gold’s economic soulmate. Thailand will be swamped with poisonous cobras –the US corporate variety - which will slither off with the gold.

There is an antidote to this kind of cobra venom. Strike before it bites.

As Thaksin’s popularity falls, mounting opposition to this deal and his domestic economic reforms - could raise the social and political stakes against its successful conclusion from the Thai side. US interests in Thailand like the Chamber of Commerce, Monsanto and Embassy staff are nervously eyeing this opposition.

In a US election year where Congress is unlikely to approve new trade agreements it is tempting to feel that we have a little more breathing room. Soundly defeating this deal before it is signed could put a precedent-setting spanner in the works of US bilateral free trade and investment ambitions. To achieve that goal, US global justice activists should target this agreement and join hands with their Thai comrades already engaged in this struggle.

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