TAX AND LEGAL

CPTPP – Thailand puts on the brakes yet again

Tanva Mahitivanichcha Tanva Mahitivanichcha

Thailand’s attempt to revisit the CPTPP hit another roadblock as the Ministry of Commerce withdrew its proposal for the Cabinet to endorse the trade pact at the end of April 2020. This sudden reversal was influenced by significant pushback from both the public and civic groups who were concerned that the CPTPP may hurt Thai farmers and consumers.

 

What’s the problem this time?

The problems are neither new nor unique to Thailand. Since its inception, the CPTPP – previously known as the Trans-Pacific Partnership (TPP) – has prompted concerns over various components of the trade agreement. In particular, provisions on intellectual property protection were seen as beneficial to wealthier countries and large multinational corporations while being disadvantageous for poorer countries and consumers. It is over such concerns that Thailand had initially refrained from participating in the original TPP negotiations. 

After the United States withdrew from the TPP in 2017, the remaining members of the agreement revised the trade deal into its present form and renamed it the CPTPP. Several “problematic” provisions were suspended from implementation, ostensibly to relieve CPTPP members from commitments that were previously championed by the United States and to encourage new members to join the trade pact. It is in this context that countries like Thailand renewed their interest in participating in the CPTPP.

Despite the suspension of some problematic terms, other controversial provisions remained. The CPTTP still required members to sign off on an intellectual property convention that stipulates the rights of plant breeders – the 1991 Act, International Convention for the Protection of New Varieties of Plants, commonly called the UPOV 1991.  

The application of UPOV 1991 has been the principal source of contention for Thailand’s recent stalled attempt to join the CPTPP. 

 

UPOV 1991 – Seeding controversy

By joining the CPTPP, Thailand would be required to abide by UPOV 1991. In essence, this convention grants intellectual property protection to developers of new plant strains. The owners of new plant breeds are entitled to certain rights that include determining how and when such new plants could be used. In practice, this restricts how farmers can use seeds of protected plant strains. Under the UPOV, farmers are no longer allowed to save seeds from prior harvests for commercial replanting without the breed owner’s permission. Critics of the conventions have argued that such an intellectual property protection regime favours large agrobusinesses that have sizeable R&D budgets as well as large-scale planters who are in a position to capitalise on the intellectual property arrangement. Small-scale farmers are seen as disproportionately disadvantaged. 

Naturally for lower income agrarian countries like Thailand, agreeing to UPOV 1991 is contentious and such a decision warrants serious consideration. The Thai government was seen as too hasty in its decision to join the CPTPP without adequately vetting or addressing the agricultural community’s concerns.

 

Going forward

Thailand’s latest failed attempt to join the CPTPP is a reflection of a lack of proper mechanisms and processes within the state to decide on matters of significant economic impact. 

All trade arrangements come with advantages and disadvantages. It is simply the nature of trade – there must be give and take. The government’s duty is to determine, in a clear and transparent matter, whether society as a whole stands to benefit from a deal. It must also design and implement assistance or remediation measures for the persons in society who would lose out under the deal.