FTA with US: Thai investors ’set to reap big benefits’
FTA WITH THE US: Thai investors ’set to reap big benefits’
The Nation | Bangkok | 24 May 2004
The upcoming Thai-US free-trade agreement will benefit Thai investors as further business opportunities open up in a vast market which imports goods and services worth about US$1.5 trillion (Bt60 trillion) annually.
A senior US economic official, who asked not be named, made the comment in anticipation of the first round of Thai-US free-trade negotiations which are set to start on June 28.
"If you look at the trade side, Thailand now exports around $15 billion to the US, which is 1 per cent of the US market. So what it means is Thailand can have the potential to increase access to the US," the official said.
Despite the concerns of some local industries, an FTA with the United States will also attract more American investment and support the Kingdom’s plan to become a regional business hub, he said, adding that for the US the FTA is "the most important" economic issue in bilateral relations.
"The US economic presence has been in Thailand for a long time. We have a Treaty of Amity and this is another way to fur-|ther close cooperation. Thailand is very much an ally and partner. We have a tax treaty and now we’ll have the free-trade agreement," he said.
US negotiators will seek a comprehensive FTA. "Certainly, our preference is to see a comprehensive FTA, which deals with all the issues - trade, investment, tariffs and services," he said.
The areas that will require the most intense negotiations are reduction of tariffs and the opening up of markets that have been protected, such as defence, telecoms and automobile, he |said.
Intellectual property should also be part of the agreement as it is in America’s FTAs with Singapore and Chile, he said.
Earlier this year, US Congressman Dennis Kucinich put pressure on US Trade Representative Robert Zoellick to "address Prime Minister Thaksin Shinawatra’s repressive policies and his cosying up to Burma’s brutal military junta".
However, the US official, said there would not be much room to discuss human rights though talks may touch on the outsourcing of labour from the US. But even if the FTA covers labour migration he did not expect to see this issue as a central one, he said.
The US has concluded FTAs with a number of countries over the past few years, including Australia and Singapore. It has also implemented free trade with Canada and Mexico under the North American Free Trade Agreement, and signed FTAs with Israel, Jordan and Morocco.
The proliferation of bilateral FTAs has raised concerns that the trend may undermine multilateral institutions such as the World Trade Organisation (WTO). The US official, however, said this would be unlikely.
"I don’t think any of these [trade talks] are inconsistent with each other. There are some issues that we have to deal with under the WTO, such as agricultural subsidies, which are hard to deal with bilaterally," he said, adding that bilateral, regional and international trade agreements should be seen as tools to create an open-market atmosphere.
Thailand is on track to be the second country in the region, after Singapore, to sign an FTA with the US. The idea was first floated during the Asia Pacific Economic Cooperation (Apec) summit in Mexico two years ago and was pushed to the forefront during US President George W Bush’s visit to Thailand for the Apec summit last October.
The two governments have not set a deadline for conclud-|ing the deal, but previous FTAs negotiated by the US usually consist of about nine rounds of talks over 18 to 24 months, the official said.
It took 18 months for negotiators to hammer out a deal with Singapore, but talks with Chile started in 1996 and did not conclude until early this year, he said, adding that the timeline "depends on many factors".
Jeerawat Na Thalang
THE NATION
