logo logo

Don’t rush to sign FTA, Nesac warns

The Nation, Thailand

Don’t rush to sign FTA, Nesac warns

Ignore US deadline, advisory council says, citing potential risks to financial sector

By Pennapa Hongthong

10 February 2006

The National Economic and Social Advisory Council yesterday warned the prime minister not to let the immediate gains from opening trades with the US blind him to the latent risks of rushing into an economic partnership.

“We should take our time, there is no need to be trapped by the timeline set by the US,” said Vorapol Socatiyanurak, vice president of Nesac. Vorapol was giving advice based on a white paper produced by Nesac, during the first meeting between the council and Thaksin Shinawatra.

Thaksin denied that the Thai negotiating team was under pressure to strike a deal at all costs. Earlier a commercial counsellor at the US Embassy insisted that the Bush administration was seeking to conclude talks by the April 30 deadline. The next round was expected to take place in Washington later this month or early March.

Vorapol said Nesac recently finished its study on the potential impacts of a trade pact with the US and found that the country would realise some gains up front, but serious problems would not become apparent until later.

The executive summary has already been presented to the premier while the full version would be submitted to him soon, he said.

“I’m not sure what the government is going to do with the paper. We just fulfilled our responsibility as stated in the Charter - to give advice to the government,” he said.

Thaksin said the talks must move forward to protect the trade surplus with the US. He understands the concerns over possible harmful aspects, but the public should not worry because the Thai negotiating team has always kept the nation’s interests to the fore. Any aspects to Thailand’s disadvantage would be rejected, he said.

The council’s study projected that at least three local industries - auto parts, agricultural commodities and textiles - stood to benefit soon from duty-free exports. But other industries such as financial services would end up threatened by sophisticated rivals, as the government would have to apply “national treatment” to US investors.

“The good times would last only for a while since the US is trying to open free-trade areas with 30-40 other countries. This means that sooner or later we will have to compete with other countries and there’s nothing to guarantee that we can defeat them,” said Witoon Leanchamroon, a Nesac member.