Streetwise: Nervous exporters await US trade review

In 2007, Thailand was dropped from the Special 301 Watch List, where it had been since 1994, to the Priority Watch List, reflecting an overall deterioration in the protection of intellectual-property rights (IPR).

This year's review is occurring now, and the final report is expected to be released no later than April 30 amid fears that Thailand could be downgraded to a Priority Foreign Country.

If Thailand's status is downgraded, it will be a severe blow to exporters. Aside from the slump in world trade, which led to a 26-per-cent contraction in January exports, the situation could be worse. Placement on this list is rare and considered a last resort, as the country is subject to extensive trade investigation and, potentially, trade sanctions.

Certainly, even though only 15 per cent of Thailand's exports go to the US, it is a major market.

The US sees such actions as necessary to protect IPR, which is its lifeblood. Indeed, it has good reasons: economic growth depends on innovations and the ability of new industries to develop and grow. That is why it is so insistent Thailand crack down on counterfeit products. And as the penalties are severe, that explains why it becomes harder to find a fake DVD.

When the crackdown was intense, most buyers - Thai and foreign alike - were disappointed when they were unable to find the fake products, which are priced at Bt80, against about Bt300 for the original product.

Robert Griffiths, an economic counsellor at the US Embassy in Bangkok, has noticed an improvement in Thailand's IPR.

Six or 12 months ago, while wandering around Pantip Plaza, notorious for fake products, he was surprised to see fake items splashed all through one shop. He asked the female vendor if she was  afraid to sell counterfeit products.

"No. My boyfriend is a police officer," she said.

Then recently, he asked a vendor the same question, and the answer he received was: "Yes."

While acknowledging this to be the view of only one vendor, Griffiths took it as a sign of improvement in terms of IPR.

Exporters must have high hopes that the US government takes his view into account when reviewing the Special 301 designation for Thailand.