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Preferences, conflicts in the way of free trade pact with EU

The Nation, Bangkok

24 September 2004

Preferences, conflicts in the way of free trade pact with EU

By Benjaprut Akkarasriprapai

The European Union and Thailand are unlikely to forge a free trade agreement (FTA) because the grouping is currently focusing on its 10 new members, business pundits said yesterday.

“Bilateral negotiations between Thailand and the EU are next to impossible,” said Pornsilp Patcharintanakul, deputy secretary-general of the Thai Chamber of Commerce.

“The EU is more interested in regional cooperation under the Asean framework than bilateral arrangements.”

Speaking during a Thai-EU FTA seminar, organised by the Ministry of Foreign Affairs yesterday, he said any future plans for free trade pact with the EU would also be hampered by a trade dispute between Thailand and the EU over hygiene issues for exports to Europe.

Sayan Chanvipaswongse, deputy secretary-general of the Federation of Thai Industries (FTI), said Thailand would inevitably have little negotiating power with the EU.

The Europeans would raise issues like food safety, genetically modified organisms (GMO), telecommunications liberalisation, intellectual property rights and other non-tariff barriers.

Sayan, who is also secretary of International Economics Committee, said that Thai industries would also to pay dearly for the EU’s strict enforcement of trade regulations, such as restrictions on the use of hazardous substances in electrical and electronic equipment.

Thai farmers would have little hope of competing with new EU members like Poland, Hungary and the Czech Republic. Thailand could also be asked to import more dairy products, which would affect local producers, he said.

If an FTA were to be reached, Sayan said, Thailand should draw up a framework for mutual recognition, ensuring certain products were included, more imports would come from the EU side and the EU would put in more direct investment.

Ketpirun Kohsuwan, of the Commerce Ministry’s Department of Trade Negotiations, said an FTA was unlikely because the EU has a population of 450 million and Thailand has only 60 million.

She said cooperation under an Asean framework was more likely.

The EU is Thailand’s fourth largest trading partner following Asean, Japan and the United States. Thailand exported goods worth Bt500 billion to the EU last year and imported goods worth Bt300 billion.