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Free-trade agreement : Thailand rejects deal with South Korea

The Nation | Bangkok | 9 May 2006

Thailand rejects deal with South Korea

Kingdom is only Asean member not to sign, due to row over rice

Thailand is the only Asean member not planning to sign the free-trade agreement (FTA) with South Korea and will thus lose export competitiveness, due to higher import tariffs.

By remaining outside the Asean-South Korean FTA, Thai export goods will be subject to normal South Korean import tariffs instead of the lower rates stipulated in the agreement. All nine other Asean countries will ink the pact this month.

Apiradi Tantraporn, director-general of the Trade Negotiations Department, said yesterday that Thailand would definitely not sign the deal, even though other members were planning to this month. The FTA is scheduled to be implemented on July 1.

Thailand refuses to sign because rice is on the exclusion list. Rice is the Kingdom’s most important crop, and Thailand is the world’s biggest exporter of rice.

Although Thailand will be the only member not to have reached a final agreement with South Korea, Apiradi said the other members understood Thai-land’s position.

She said Thai-land had already sent product lists for compensation from South Korea and was awaiting its decision.

Apiradi also said the existence of a caretaker government prevent-ed Thailand from signing any agreement at this time anyway.

In addition, European Union Trade Commissioner Peter Mandelson will meet with Asean economic ministers on Tuesday in the Philippines, at a meeting aimed at promoting both economic ties and FTAs between the two regions.

The Asean Economic Minis-ters meeting re-treat will be held on Monday and Tuesday on Boracay Island.

"The EU sees Asean has im-proved economic relations with many countries, so now it also would like to cooperate more closely with Asean economically," Apiradi Tantraporn said.

She said Mandelson would be looking for improved cooperation with Asean in order to increase economic growth and that the EU would also support Asean development projects.

The Asean ministers and EU officials will review progress towards economic cooperation on a list of 11 products and services, plus additional logistics services.

The two sides will also work on accelerating the establishment of an Asean Economic Community by 2015, earlier than the current 2020 target date.

The main focus of the meeting, however, will be on a framework for negotiations for an EU-Asean FTA.

Apiradi said it was a good sign the EU wanted closer relations with Thailand, because it showed Asean had an influence on the global economy.

Ministry research into an EU-Asean FTA should be completed by mid-year and will be crucial to progress in trade negotiations between the two regions.

Petchanet Pratruangkrai

The Nation

 source: The Nation