Talks to Halt Illegal Thai Record Copying Fail to Bear Fruit

Talks between international record producers and Thailand’s pirate tape industry have failed to turn up a compromise formula for ending the large-scale illegal copying of records.

“We couldn’t reach an agreement,” said Giouw Jui Chian, Southeast Asian regional director of the International Federation of the Phonographic Industry, which represents American and other Western record companies.

Thailand has been accused of being the worst violator of intellectual property rights in Asia, pirating millions of dollars a year worth of copyrighted audio and video tapes as well as computer programs.

The U.S. government in April put Thailand on a list of “priority foreign countries” threatened with trade sanctions if the problem was not resolved.

Giouw said the main stumbling blocks in the talks were how much time Thai producers would have to clear inventories of pirated tapes and which companies would be allowed to continue producing once legal procedures were established.

The Thai Magnetic Tape & Record Assn. said it stopped production of pirated recordings when the negotiations started May 10. The talks ended Thursday.

Giouw said the producers’ group had offered Thai manufacturers a six-month grace period to sell existing inventories. He said it was in the record producers’ interest to allow some flexibility so distribution networks could be maintained.

Pirated Thai audio tapes retail for about $1 per album. None of the money is paid to producers or original artists.

The Thai manufacturers had demanded two years to sell off their stocks, contending that they had a huge inventory and large capital investment in copying equipment. The Thais had also demanded creation of a holding company that would lease the copyrights of all record producers to the 30 manufacturers in the country for reproduction.

Record producers rejected this proposal, saying that it resembled distribution schemes in Communist countries, which the producers have been trying to dismantle.

“The industry will not be affected by the changeover, but the manufacturers will be,” Giouw said. “We told them there was no way all 30 local manufacturers could remain in business.”

Still, suspension of new production and an agreement to negotiate is a major breakthrough in Thailand, where the government had virtually given up enforcing copyright laws.

Charoenchai Wangarayatham, head of the Thai manufacturing group, said stepped-up police raids forced the organization to the bargaining table. In the past, copyright violators could be forced to post a bond of about $800, which many firms absorbed as a business cost. Now the bail has been raised to $1,600 for small shops and $4,000 for larger establishments. As a result, pirate tape shops have been hoarding receipts to pay bail and not paying manufacturers. “It’s chaos in the market,” Charoenchai said.

Last week, Interim Prime Minister Anand Panyarachun warned Thai industrialists that the United States was an economic superpower and it would be against Thai interests to ignore U.S. demands in the copyright field.

“We each need to adjust our positions, though I admit that Thailand may have to go a longer distance than the U.S. in bridging our differences,” said Anand, who was appointed by the military following a Feb. 23 coup that toppled the civilian government.