FTA deal with Japan would likely be signed by interim government
Bangkok Post | 23 December 2006
FTA deal with Japan would likely be signed by interim government
ACHARA ASHAYAGACHAT
Despite criticism over its possible negative impacts, the government plans to proceed with the Thai-Japanese Free Trade Area agreement, saying the pact would likely be signed before this interim government’s term expires. Deputy Prime Minister and Finance Minister M R Pridiyathorn Devakula has assured that the negative impacts from the deal, also known as the Japan-Thailand Economic Partnership Agreement (JTEPA), would be manageable.
The government has already considered the draft agreement and believes the JTEPA was a balanced accord and should be signed before the end of this government’s one-year term, since sensitive areas like telecommunications, investment and services sectors, as well as finance, have all been excluded from the agreement.
The steel industry, for example, would have an adjustment period of 7-10 years and the government would also set up a fund to help the affected sectors, M R Pridiyathorn said at a public hearing. Somkiat Tangkitvanich, a senior researcher at the Thailand Development Research Institute (TDRI) who had studied the draft for three months, said the deal would not undermine the Thai economy.
But to reap maximum benefits from this agreement required further efforts, including regular trade reviews and serious capacity-building for Thai entrepreneurs, so that their efficiency could be improved to increase Thailand’s competitiveness on the whole, said Mr Somkiat.
Thai importers would benefit from Japan’s tariff reduction by up to 16,000 million baht in the first year and gradually that amount would climb to 70,000 million baht in the 16th year, he added.
However, farm products which accounted for 3% of the total export value were not reduced to a zero tariff rate. Malaysia and Singapore had successfully negotiated a zero tariff rate with Japan in their FTA deals.
Non-tariff barriers (NTBs) were also not mentioned which reflected the toughness of the negotiations, which Japan and Thailand would continue to pursue at the multilateral level.
Other significant issues, dealing with Japan’s liberalisation of other occupations such as technicians, massage practitioners and care-helpers and its regulation on the origin of products, will be negotiated later after the first 2-5 years of implementation of the agreement.
Pramon Sutheewong, chairman of the Board of Trade, said JTEPA was a significant agreement for the Thai economy given that Japan was Thailand’s second largest market and biggest investor. But to maximise the benefits from the deal the private sector would have to work out on its own how to implement the ’’Cooperation in Nine Sectors’’ which Japan has kept under wraps in its deals with other countries. Kiat Sittiamorn, a Democrat Party member, said the interim government should review the whole process and work out a new strategy for international trade negotiations before entering into any trade deals.
Preparations to help those affected by globalisation were also minimal, Mr Kiat said, adding ’’the ex-government’s plan of a billion-baht-per-annum fund has actually been reduced to a 300 million baht budget and less than a million baht has so far been spent to help farmers affected by the FTA deal with China. So why hurry?’’
Witoon Lianchamroon, a member of the FTA Watch, also questioned the interim government for accelerating the process, even though the National Human Rights Commission and the National Economic and Social Council had cautioned over its transparency and lack of people’s participation. Former Bangkok senator Chirmsak Pinthong conceded that there might be a need for further sessions to provide in-depth information for specific groups to wipe out mistrust among the public and the negotiators.
Virachai Plasai, head of Foreign Ministry’s international economics department, defended the tariff reduction on industrial wastes, which was a key concern among environmentalist, and said it was included in the draft text for only tactical reasons since Thailand already had laws to prevent the importing of chemical wastes.
