Not all share PM’s wish for fast FTA
Published on September 22, 2005
Finance Minister Thanong Bidaya said yesterday that the Thai-US free-trade agreement (FTA) would be difficult to hurry as Thai bankers are concerned about competing with their sophisticated counterparts in the field of e-banking. “I can’t say when the deal could be concluded because both sides still use absolutely different approaches,” Thanong said.
He made the comment a day after Prime Minister Thaksin Shinawatra and US President George W Bush said they would wrap up a bilateral trade pact early next year.
A Thai official, who requested anonymity, said the team felt pressure from the top down to speed up the talks after Thaksin agreed to the early completion target.
Officials from Thailand and the United States will meet tomorrow and Saturday in Washington DC to discuss financial services liberalisation before the full delegations of both sides head for Honolulu and the fifth round of negotiations.
The government has said all along that it would adopt a positive list to limit the scope of items subject to liberalisation under the FTA, while Washington prefers a negative list, asking both sides to present the items to be excluded.
The problem the government sees with the US approach is that products of the future would automatically come under the FTA.
“We fear that by using a negative list, negotiators won’t be able to cover the sectors of future technology, especially in financial services. The area that every Thai bank is worried about is electronic banking,” Thanong said.
Commerce Minister Somkid Jatusripitak also expressed concern over the financial sector. “US businesses are very strong. It would be hard for Thailand to compete with them,” he said.
Naris Chaiyasoot, director of the Fiscal Policy Office, said that during next week’s talks the government would submit its draft on financial service liberalisation, calling for more time.
“We have to open up the financial sector in phases to ensure financial stability,” he said, adding that Thailand is in the process of building strong financial and legal systems.
“We will try to make some progress but it should come under a framework acceptable to us,” he said.
Developing nations should also be entitled to some flexibility in implementing prudential economic policy to ensure financial stability, he said.
The US expressed concern on Tuesday over Thailand’s reported ambivalence about opening up certain sectors under the FTA, especially finance.
“Noting concerns about Thailand’s progress in key areas of the negotiations,” Rob Portman, US Trade Representative, told visiting Foreign Minister Kantathi Suphamongkhon “to direct his team to take strong steps forward” in the next round of the FTA negotiations beginning on Monday, USTR spokeswoman Neena Moorjani told reporters.
Portman underlined the need to complete the FTA by spring, Neena said.
“[Portman and Kantathi’s] discussion focused on how US and Thai businesses, investors, and workers will benefit from more open trade and investment rules in both countries,” she said.
Four rounds have been held over more than a year by the two sides without any breakthrough. Sensitivities in agriculture and intellectual property rights are among the stumbling blocks.
Naris described the financial liberalisation draft as a major step for the talks. For instance, it recommends the setting up of a financial services committee to sort out issues before they become disputes. Restrictions have been added to safeguard the balance of payments. It also proposes provisions for prudent measures and macroeconomic and financial stability.
FTAs have to be approved by the US Congress before implementation.
The US is Thailand’s largest export market, and Thailand is the 18th-biggest US trading partner.
Two-way merchandise trade rose 14 per cent to US$23.9 billion (Bt980 billion) last year, according to US statistics.