Free trade, but not fair trade
7 Devember 2005
Post Today Editorial - Early results of the free trade agreements (FTAs) Thailand made with China, Australia, New Zealand and India are quite worrying for the country.
In the first year of FTAs with China and Australia, Thailand recorded a combined trade deficit of 78 billion baht. We gained trade surpluses of 8.8 billion baht and 5.9 billion baht with New Zealand and India, respectively, but the gains were negligible when compared with the huge deficits with China and Australia.
What went wrong?
Throughout its FTA negotiations with the four countries, the government of Prime Minister Thaksin Shinawatra insisted that they would offer new opportunities for Thailand in trade and investment. FTA agreements are necessary in a globalised world, we were told. Thailand would lag behind other countries if it failed to ink free trade pacts with trade partners.
As export and import figures show, however, many of our trade partners seem to profit from the FTAs more than we do. If this trend continues in the next 10 years, when Thailand is expected to enter into more FTAs, the country will be in trouble.
The idea for an FTA is good. But our negotiators seem to lack the expertise and skills necessary to secure a fair deal for the country. We tend to lose out to bigger countries with high bargaining powers. We should learn from our own experience and that of the countries that have fared well.
Lack of information and preparedness are two of the glaring weaknesses of our trade negotiators. When trade deals are made in haste, it is ordinary people, business operators and farmers who will have to pay the price.
It is not too late for the government to re-evaluate all the FTA deals and call for amendments to certain clauses that put us at a disadvantage. An FTA deal should offer a win-win situation for both parties. Neither side should be the loser.
One year is long enough to see the effects of our FTA deals with foreign countries. Now is the time to take stock and to take corrective measures on the basis of fairness and shared benefits.