VZCZCXRO2105
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHBK #2542/01 1270155
ZNR UUUUU ZZH
R 070155Z MAY 07 ZDK
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC 6690
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHGV/USMISSION GENEVA 1825
RUCPDOC/USDOC WASHINGTON DC
RUEAUSA/DEPT OF HHS WASHINGTON DC

UNCLAS SECTION 01 OF 02 BANGKOK 002542 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
STATE PASS USTR FOR B. WEISEL, C. WILSON 
STATE PASS USPTO 
HHS/OHGA FOR AMAR BHAT 
USDOC FOR JKELLY 
 
E.O. 12958:N/A 
TAGS: ECON ETRD KIPR TH
SUBJECT: SPECIAL 301 RESULTS CONTROVERSIAL, CL'S BLAMED FOR 
DOWNGRADE 
 
REF: SECSTATE 56533 
 
BANGKOK 00002542  001.2 OF 002 
 
 
¶1.  Summary:  Thailand's placement on USTR's Special 301 Priority 
Watch List (PWL) for IPR violations sparked controversy and 
recrimination, but also an RTG commitment to work with the USG to 
improve IPR protection and find a way off the list.  As expected, 
RTG officials, press and general public presumed the primary factor 
for the PWL decision was the recent controversy over compulsory 
licenses on pharmaceutical products, and glossed over most other IP 
concerns.  Commerce officials and private sector groups are nervous 
that the PWL decision will affect their eligibility for GSP benefits 
and will further damage Thailand's image as a favorable destination 
for investment.  Department of Intellectual Property officials 
reacted defensively to the USG decision, but are anxious to return 
to the good graces of the U.S.  End Summary. 
 
¶2.  On April 30, in advance of the release of the USTR Special 301 
report, Econoff and USPTO Attache met with Department of 
Intellectual Property (DIP) Director General Ms. Puangrat Asvapisit 
and broke the news that Thailand would be elevated to Priority Watch 
List.  DIP officials were disappointed but not surprised by the 
decision.  As expected, officials assumed the decision was driven by 
USG displeasure over the RTG action in late 2006 and early 2007 to 
issue compulsory licenses (CLs) on three patented drugs, including 
two HIV/AIDS medicines patented by U.S. companies.  Econoff 
explained that while the compulsory licenses were cited as a concern 
in USTR's report, the issue was only one of many cited and not the 
deciding factor.  DG Puangrat countered that raids, seizures and 
arrests for IP crimes had increased in 2006 and saw no other 
significant deterioration of IP protection that would warrant a 
downgrade other than the compulsory license actions.  Nevertheless, 
Emboffs engaged in a fruitful discussion with DIP of Thailand's IP 
shortcomings and agreed to meet again to discuss means to address 
USG concerns.  DIP was relieved that Thailand's GSP benefits would 
not be directly affected by their placement on PWL. 
 
¶3.  In a press briefing on May 1, the Ambassador explained the 
Special 301 decision and the underlying reasons behind Thailand's 
elevation to PWL.  English language and Thai papers gave front page 
placement for the news and have continued to give prominent, though 
mostly negative, treatment to the story throughout the week. 
"Outrage grows at US trade pressure", screamed a front page headline 
on Thursday's English language daily The Nation.  Most papers picked 
up the Ambassador's explanation of the reasons for the downgrade to 
PWL, and the context of the compulsory license issue.  Nevertheless, 
typical stories declared CLs as the primary reason and included 
defiant statements from the Minister of Public Health that his 
Ministry would not back down under USG pressure and would maintain 
the CLs in force.  The Minister blamed the PWL decision on pressure 
on USTR from U.S.-based pharmaceutical companies.  However, several 
papers also detailed the long list of other IP concerns mentioned in 
the 301 report and explained in the press conference. 
 
¶4.  Early press stories before the 301 announcement predicted a PWL 
decision would result in an immediate cut off of Thailand's trade 
benefits under the Generalized System of Preferences (GSP) program. 
The Ambassador's statement that PWL would not trigger a change in 
the GSP program toned down ensuing stories, but press reports 
nevertheless characterized the move as a trade retaliation, and 
quoted industry concerns about future cuts in trade benefits.  RTG 
officials and local business also expressed angst over yet another 
blow to Thailand's investment environment, following on 
controversial capital controls and proposed amendments to the 
Foreign Business Act that would restrict foreign investment. 
 
¶5.  In a bizarre twist to the story, the RTG discovered that a 
pro-pharma NGO in the U.S., USA for Innovation, that was advocating 
Priority Watch List for Thailand was linked to former PM Thaksin. 
The NGO's executive director, Ken Adelman, is a senior adviser to 
Edelman Public Relations, a firm also contracted by Thaksin. 
Accusations flew that Thaksin had somehow used the connection to 
influence USTR's decision to further discredit the current 
government. 
 
¶6.  On May 3, 30-40 demonstrators representing a local HIV/AIDS 
organization protested the PWL decision in front of the U.S. 
Embassy.  Ambassador invited the group's leaders to discuss the 
issue but was rebuffed; one protestor said, "We came to shout at 
you, not to talk to you."  After two hours of protests the group 
dispersed.  Local press widely covered the demonstration, but also 
noted the group's refusal to meet with the Ambassador. 
 
 
BANGKOK 00002542  002.2 OF 002 
 
 
Minister of Health takes to the Hustings 
---------------------------------------- 
 
¶7.  Press reported PM Surayud was concerned over the PWL placement 
and has decided the answer is, naturally, for the RTG to better 
explain its decision to issue CLs.  Having postponed an earlier trip 
due to medical reasons, Minister of Public Health Mongkol na 
Songkhla will be traveling to the U.S. May 21-22 to meet with USG 
officials on the topic.  Before meeting in Washington, he also plans 
to travel to New York City on May 8 to sign a deal with the Clinton 
Foundation on bulk procurement of drugs.  From there he travels to 
Geneva for World Health Assembly meetings.  The Minister reportedly 
is scheduled to meet health officials from other developing 
countries to discuss the use of CLs.  In a pre-departure 
conversation with the Ambassador, the Minister said the CLs were 
"over" and that he was "getting bored" of the issue.  The Minister 
responded favorably to Ambassador's suggestion he meet with pharma 
company headquarters during his visit to New York. 
 
Next steps 
---------- 
 
¶8.  DIP officials have agreed to meet with Embassy on May 11 to 
discuss next steps and a possible IPR Action Plan to guide the way 
for eventual removal from PWL.  Embassy plans to discuss a Plan 
oriented toward improving enforcement activities and reforming 
judicial practices that have hampered enforcement efforts in the 
past.  Commerce officials have already announced plans to form an 
interagency group of IPR-related agencies to discuss issues with the 
U.S. 
 
¶9.  Comment:  Controversy over Thailand's downgrade to Priority 
Watch List was inevitable.  Months of emotional arguments in favor 
of and against compulsory licenses primed the Thai public for what 
is now considered the U.S.'s retribution.  Criticism has been severe 
at times, and the story continues to have legs.  However, fears that 
the issue would be seized upon by the coup-installed government or a 
political party to stake out a nationalist position have not yet 
materialized.  As hoped, lower level officials in DIP and the 
Ministry of Commerce have not let their disappointment become a 
rejection of U.S. concerns on intellectual property and seem 
prepared to work with Embassy on new initiatives.  The year will see 
if the RTG is prepared to bring forth a more serious approach to 
enforcement, but we remain cautiously optimistic that today's 
negative story will still bear fruit tomorrow. 
BOYCE