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Professions brace for FTA impact

Bangkok Post

Professions brace for FTA impact

13 June 2005


Businesses such as cars, steel, textiles and telecoms may grab the headlines in the continuing debate over free trade area (FTA) agreements, but members of many professions in Thailand are also preparing for changes once markets for their services open.

Engineers, accountants, lawyers, professors and architects will all face more competition to varying degrees, say local experts.

From a consumer’s standpoint, the beginning of an FTA usually means a greater variety of choices, with more participants in the market.

But experts say there will be a major impetus for change following the opening of domestic markets to FTAs over the next three years or so. Several occupations once protected by Thai laws _ architect, engineer and accountant to name a few _ will be open to international competition which could have a negative impact on small-to-medium sized business operators and professional practitioners.

``An FTA is a double-edged sword,’’ notes Chalit Limpanavech, an academic and dean of Assumption University of Thailand. ``If the [market] opening is fair and just, then there will be no problem. But, if it isn’t, then the country and professional individuals will be significantly affected.’’

Given the current state of globalisation, the professor believes free competition is inevitable. But he believes the government needs to account for and combat equally inevitable negative impacts on domestic markets.

``To do this, the government must really possess strong corporate governance,’’ Mr Chalit said.

He believes that as soon as Thailand opens the educational market to international competition, particularly with Australia, local teachers and educational institutions, especially those providing international curricula, could suffer.

``One possible solution is to enforce rules requiring overseas institutions to construct joint programmes with local universities instead of allowing them to freely participate in the market,’’ he suggests.

Janjira Wongkhumthong, president of the Association of Private Higher Education Institutions, agrees there will be negative impact on local professions because of FTAs. But she also questions the quality of curricula offered by the foreign institutions.

``Usually, [foreign institutions] enter a local market with their well-known brands that make highly expensive tuition fees possible. It’s okay if the quality of the curriculum turns out to be the same level as offered in their home countries. But if it’s not, the quality of future graduates will be jeopardised,’’ she said.

Other professional services are at risk, according to Duangrit Boonnag, vice-president for foreign affairs of the Association of Siamese Architects (ASA), which operates under Royal patronage.

He supports opening the Thai market, without restrictions, because of the overall value of trade liberalisation to consumers. However, international competition must be regulated by fair agreements and rules.

Mr Duangrit estimates recent construction projects employing foreign professionals have totalled several billion baht, with architects’ fees reaching more than 300 million baht.

In the near future, in the worst-case scenario, the loss to Thai architects could be even more, says Thaweejit Chandrasakha, the ASA vice-president for professional practice.

There could be serious ramifications for the profession because of the government’s current fixation on megaprojects to stimulate the economy. ``That’s because foreign competitors will not be interested in the small stuff, but the huge projects,’’ said Mr Thaweejit.

To ease the impact of possible losses, the experts say it is necessary to outline mutual agreements and regulations spelling out the freedoms of foreign operators.

The ASA has held such talks with its counterpart professional associations in Japan, Malaysia and Singapore, and reached agreements on what architects can and cannot do in each country.

The key understandings include enforcement of a two-year internship period for foreign architects before they obtain a Thai operating licence, as well as a requirement that any foreign architectural firm must have a partnership with a local firm.

``With this agreement, we will not be significantly hurt by the FTA, but at the same time it creates a win-win situation for all,’’ Mr Duangrit says.

The association is now planning talks with its counterparts in Australia and the United States, with the goal of reaching similar agreements.