US TO RESUME TRADE TALKS WITH THAILAND, MALAYSIA

The US has resumed stagnant free trade agreement negotiations with Malaysia and is looking to do the same with Thailand, according to reports from the US trade representative's office this week.

Talks with Bangkok were put on hold in 2006, after a military coup in the Southeast Asian country. Negotiations with Malaysia have started to move forward after running aground over differences last summer, and then being held up by Malaysian general elections earlier this month.

Representatives from the US and Thailand met in Bangkok this week, with hopes of resuming negotiations in coming months. Assistant US Trade Representative Barbara Weisel met Thai Commerce Minister Mingkwan Sangsuwan to discuss overall trade relations. The US is Thailand's largest trade partner, absorbing 12.5 percent of all Thai exports.

Left out of their discussion was talk of pharmaceuticals, a main point of contention even before the FTA talks were suspended. Since then, the Thai government has raised the ire of Western pharmaceutical companies - and won the praise of public health activists - by issuing compulsory licenses effectively suspending patent protection for certain drugs used to treat HIV/AIDS and heart disease. The decree authorises the import and domestic production of cheap generic versions for public health programmes.

While the compulsory licenses do not go against WTO rules, the US has complained that Bangkok's decision process was not sufficiently transparent. The US trade representative's office currently places Thailand third on its Priority Watch List, which monitors other countries' protections of US intellectual property rights. Further elevation on the list could mean possible trade sanctions against Thailand.

As for Malaysia, US Ambassador to Malaysia James Keith last week expressed hope that a comprehensive bilateral FTA would be finalised by the middle of this year.

Talks have largely stalled since the two parties failed to complete a deal in time for it to be submitted to the US Congress under the Bush administration's 'fast-track' authority, which expired in mid-2007.

The sixth round of negotiations took place in late January. The next round, scheduled for April, will be the first under the new government, which will notably see longtime trade minister Rafidah Aziz replaced by Muhyiddin Yassin, the former farm minister. The final barriers to the deal are US access to Malaysian financial services markets and public procurement. In Malaysia, government contracts are subject to a government affirmative action programme benefiting the ethnic-Malay 'bumiputra' majority. Keith is confident the two sides will resolve their disagreements in the coming months.

ICTSD reporting; "US, Thai officials talk trade for first time since coup," AGENCE PRESS FRANCE, 16 March 2008. "A first step to better Thai-US Trade Relations", THE NATION 15 March 2008. "U.S. Trade Representative Places Thailand On Priority Watch List In Annual Report," MEDICAL NEWS TODAY, 3 May 2007. "U.S. eyes free trade pact with Malaysia", XINHUA, 13 March 2008. "US seeks to conclude FTA," THE STAR, 14 March 2008. "Malaysia PM shakes up cabinet after poll setback" REUTERS, 18 March 2008.