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Behind every FTA lie the TNCs examples from Thailand (November 2007)

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Interview with Witoon Lianchamroon, BIOTHAI, for Fighting FTAs


A 12-minute interview with Witoon Lianchamroon, conducted by Aziz Choudry, that focuses on the impacts of the U.S.-Thailand Free Trade Agreement on local industries in Thailand, specifically focusing on the ways that the U.S. driven trade agreement has shaped elements of local industries increasingly focused on an export driven economic model, to the detriment of local markets and self-sufficient local markets. — Stefan Christoff


 


Behind every FTA lie the TNCs: examples from Thailand


 


Interview with Witoon Lianchamroon, BIOTHAI conducted by Aziz Choudry, bilaterals.org, for Fighting FTAs November 2007


 


Q: In regard to the Thailand-Australia free trade agreement that was signed a few years ago, there were specific concerns about the impacts on dairy farmers in Thailand. Can you tell us about what those impacts are and what the reactions of farmers have been to the agreement?


 


The Thai-Australia FTA has had impacts on dairy farmers. Within one year after the signing of the FTA, the Thai dairy farmers’ association issued a report that said that one-third of the members’ dairy farms collapsed because of this FTA. They had to change their livelihoods to look for another job. This is because the cost of production of dairy products in Thailand is two or three times higher than the Australian one. But beef farmers are also impacted. In Thailand, around one million farmers raise cattle for beef. But the impact there is happening on a more long term basis because we have to decrease our tariffs from 40% to 0% within 15 years. That means that this will happen in the near future. But for the dairy farmers, it’s clear that after the signing they had no hope for their jobs. So they had to quit and look for another job.


 


This issue gets raised in a context of conflicts of interest. When you look at all the impacts, farmers have had to lose their jobs, but big industry — such as the auto parts company that belongs to the Minister of Transportation — gains from this FTA. This sector increased its exports to Australia by more than 70%! Another industry is the food industry, mainly seafood products and chicken. This sector belongs to Charoen Pokphand (CP) and other food companies. Their exports increased by 50%. So it’s clear that with the signing of the FTA, the ones who gain are the big companies involved in Thaksin’s cabinet, while the people — the farmers — lose.


 


Q: Charoen Pokphand is a transnational corporation - a Thai company that is now going global and has been doing so for a while. What has been the role of CP in these different trade negotiations? You mentioned that they’re very close to people within the Thaksin government. What kind of things have they been doing or pushing for in the free trade agreements that Thailand has been negotiating?


 


CP had a very close relation with Thaksin’s cabinet. The Minister of Commerce during the start of the US-Thai FTA negotiations was the son-in-law of the head of CP. At the same time, he was the head of negotiations for the Thai government for the first round of negotiations in Washington DC, two or three years ago! It is clear that if you let a company that has a conflict of interest act as a representative of the country, this means that the text, the agreement, will be of benefit to that company.


 


Look at the details of negotiation. Thailand would let in cheap agricultural products, mainly soybean and corn, by decreasing the quota and the tariff on their imports. This benefits CP because this company controls the feed stuff industry in Thailand and in many countries in Asia — Vietnam, Indonesia, even in China. So on the one hand, CP will gain a lot from the cut in tariffs and quotas. On the other hand, by negotiation, the US would have to let in food products from Thailand — especially chicken or seafood products. The US just has to solve the problem of SPS or TBT to allow the product from CP to enter the US market. That means that CP will gain on both the import and export sides. It’s clear that this happened in the FTAs with Australia and New Zealand, too, where CP gained a lot from this kind of relationship with the Thaksin cabinet.


 


But this company does not have a close relationship with just one party, like Thaksin’s, only. If you look back at history, they have a very close relationship even with the Democrat Party, that is expected to form the new cabinet after the election this December. Even after the coup. It is known by many people that the Minister of Agriculture of the interim government has a very, very close relation with CP.


 


So this is one of the important issues behind an FTA. Not only in Thailand, but in many countries. The ones who are behind these kind of negotiations are big industry.


 


Q: And their interests are often quite opposed to the interests of small farmers...


 


Yes. One very clear example is with the FTA between Thailand and Japan, the Japan-Thailand Economic Partnership Agreement (JTEPA). Before the negotiations, the farmers, the NGOs and many people assumed that an FTA with Japan may be the first FTA that will benefit Thai farmers. Because if you compare the price of rice between Thailand and Japan, it is very clear that Japanese farmers cannot compete with the cheap price of Thai rice. At the beginning, the government said that signing an FTA with Japan will benefit Thai farmers. But at the end, through the interference of CP, the Thai government withdrew rice from the negotiating list in order to bargain with Japan so that Japan would not restrain the export of chicken, shrimp or other food products from Thailand. This business belongs to CP and to the big agricultural industry of Thailand. This means that the government agreed to withdraw something of benefit to millions of farmers in order to give a chance to a big agricultural corporation like CP!


 


- BIOTHAI


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