The Nation | Bangkok | 12 October 2004
Govt urged to go multilateral route
The international business community has called on Thailand to abandon its plans for bilateral deals and adopt instead the World Trade Organisation’s (WTO) agenda of multilateral cooperation.
Maria Livanos Cattaui, secretary-general of the International Chamber of Commerce (ICC), said many countries, including Thailand, had become frustrated by the slow pace of the WTO’s multilateral approach and had turned instead to bilateral free-trade agreements, but this was proving more expensive.
She said the complexity of the rules of origin, which vary in each agreement, meant it was less productive for businesses around the globe.
Thailand has engaged in trade talks with eight countries: the United States, Japan, China, India, Australia, New Zealand, Peru and Bahrain together with regional talks with countries in the BIMST-EC grouping.
“FTAs are not a long term gain for the country. No previous Thai government has had such a flurry of trade negotiations, and the list is likely to get longer,” Cattaui said.
“We understand the impatience of each country towards multilateralism but we have to think about everyone’s mutual interest, especially on agricultural issues which cannot be satisfied by bilateral talks. Multilateralism is the only way that can truly help developing countries,” she said.
Cattaui said bilateral and regional trade deals can cause trade diversions and distortions while undermining the multilateral system because of their discriminatory nature.
She said in some cases, bilateral deals can also lead to arrangements in which the strong dictate to the weak and create a “spaghetti bowl” of complex, overlapping arrangements which might prove costly for both business and consumers.
The ICC is made up of companies and associations from more than 130 countries. It recently asked the G-8 countries not to make the cost of security too difficult for trade and focus instead on multilateral cooperation.
Winichai Chaemchaeng, deputy director-general of Department of Trade Negotiations, said FTAs could add to the cost of doing business. However, since the WTO is making slow progress and many important products, mainly in the agricultural sector, have not been liberalised, then bilateralism has to be an alternative.
He said small and medium-sized businesses have limited access to information compared to the bigger businesses, so they should be more active in dealing with the authorities while being more aware of changes in world trade.