VZCZCXRO7364
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHBK #1599 0750954
ZNR UUUUU ZZH
R 160954Z MAR 07
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC 5634
RUCNASE/ASEAN MEMBER COLLECTIVE
RUCPDOC/USDOC WASHINGTON DC

UNCLAS BANGKOK 001599 
 
SIPDIS 
 
SIPDIS 
 
STATE PASS USTR 
STATE PASS USPTO 
USDOC FOR JKELLY 
 
E.O. 12958:N/A 
TAGS: ECON ETRD KIPR TH
SUBJECT:  AMBASSADOR PRESSES COMMERCE ON TRADE AND INVESTMENT 
 
 
¶1.  Summary:  On March 15, Ambassador met with Minister of Commerce 
Krirk-krai Jirapaet to discuss three pressing issues: currency 
controls, proposed Foreign Business Act (FBA) amendments, and 
compulsory licenses on pharmaceutical products (CLs).  Krirk-krai 
offered no assurances that policy changes could be expected to ease 
industry and USG concerns on those issues, but agreed in principle 
with USG positions, including the need to consult widely before 
enacting new broadly impacting economic policies.  Krirk-krai 
brought the long-standing complaint on bond requirements for Thai 
shrimp exports, and inquired about the possibility that Thailand 
would soon be placed on the Special 301 Priority Watch List.  End 
Summary. 
 
¶2.  Currency Controls:  The Minister explained that per his 
discussions with the Bank of Thailand (subtly making the point that 
it was not his portfolio), the original policy to require compulsory 
30 percent deposits of incoming capital was put in place to 
stabilize the currency markets, but the controls had since been 
relaxed.  He noted the stock market was sensitive to such moves and 
felt the trend was toward using interest rates adjustments to 
stabilize the currency. He admitted that too much intervention in 
the markets would weaken the system but was optimistic about the 
overall picture. 
 
¶3.  Foreign Business Act amendment:  The Ambassador noted that he 
was present when the Minister addressed the Joint Foreign Chambers 
of Commerce regarding the FBA and asked if there had been any 
updates since that time. The Minister reiterated that the intent of 
the proposed FBA amendment was not to close the door on foreign 
investment, but rather to bring clarity and good governance to the 
regulation of foreign buskness. He admitted that the perception in 
the foreign business community was negative but felt they did not 
fully appreciate the fact that he was "pardoning" all those 
companies that had been using nominees over the past few decades. He 
noted that both the National Legislative Assembly (NLA) and the 
Council of State have the ability to change the amendment and he was 
tracking the progress of the various versions working their way 
through the legislative process. He expected that further action 
could take place within 30 days, but admitted it was quite possible 
this timeline would be extended. 
 
¶4.  Compulsory Licenses:  The Ambassador delivered USTR Susan 
Schwab's letter regarding Thailand's breaking of three 
pharmaceutical patents in recent months.  He emphasized that the USG 
completely understood the RTG's efforts to combat diseases such as 
HIV/AIDS and did not contest their right to use CLs to achieve that 
goal. However, he encouraged the RTG to consult with companies prior 
to using CLs. The Ambassador made the case that advance notification 
would go a long way to smooth ruffled feathers and give companies 
the opportunity to react in a pragmatic way that would balance 
commercial and public health goals.  The Minister responded that as 
he told our Secretary of Commerce, prior notification was important 
and he would continue to encourage the Ministry of Public Health to 
work with industry. (Comment:  It appeared the Minister was placing 
full blame on MOPH and believed he had done all he could do. End 
Comment.) 
 
¶5.  Continuous Bond on shrimp exports:  The Minister raised the 
issue of U.S. Customs' requirement for Thai shrimp exporters to post 
continuous bonds and asked what the Ambassador could do to help. The 
Ambassador responded he would look into the situation when he was in 
Washington but his feel was that U.S. Customs was not in a position 
to change their policy. The Minister alluded to WTO action and 
stated he hoped it could be resolved sooner rather than later. 
 
¶6.  Special 301 and IPR:  The Minister raised rumors that Thailand 
might be moved from Watch List to Priority Watch List in the current 
Special 301 review, and asked what he could do to avert that 
outcome. He stated that the RTG IP enforcement team was doing 
everything they could do. The Ambassador stated that the finding 
would be based on what happened last year and that our companies 
have commented that IP enforcement had worsened despite the MOC's 
claim that seizures have increased by 25 percent. The DG of the 
Department of Intellectual Property was there and (incorrectly) 
stated that only three U.S. companies had complained about 
Thailand's enforcement regime.  The Ambassador asked what would be 
the reaction if Thailand was placed on the PWL; the Minister 
deflected but said he hoped to avoid a tit for tat. 
 
¶7.  Comment:  The Ambassador made the overall point that the 
economic policies of the past six months have left a negative 
impression with the foreign business community, and strongly 
encouraged the MOC to consider consulting with the foreign business 
community prior to enacting complex economic regulations.  End 
Comment. 
BOYCE