logo logo

Rational debate on FTA nearly impossible

The Nation, Bangkok

Rational debate on FTA nearly impossible

Michael J Montesano

29 June 2006

Allegations have surfaced that the Bush administration intervened earlier this year to arrange the transfer out of Thailand of a World Health Organisation representative who published comments critical of the proposed Thai-US free-trade agreement (FTA).

To date, these charges remain sketchy. But to any observer of that administration’s approach to the United Nations and other international bodies and its efforts to stifle open, truthful discussion about issues of domestic and international importance, the charges certainly ring true.

They have also revived interest here in the FTA, an issue lost in the shuffle of Thailand’s ongoing political crisis and privately viewed as dead by even high-ranking officers of the US State Department. Evidently, these officers’ views have not reached the US Consul-General in Chiang Mai, who last week organised another of her government’s series of attempts to educate the Thai public about the benefits of the FTA. Insulting to Thailand as they are, these attempts do call attention to a general lack of clarity, perspective and constructive debate on the proposed FTA in the Kingdom.

The history of Bangkok’s dealings with the Office of the United States Trade Representative (USTR) is not a happy one. A major local daily once suggested wryly that President Bill Clinton’s USTR, Charlene Barshefsky, took as her personal motto: "Free trade is what I say it is." And it would be fair for Bangkok to remind Barshefsky’s successors at the USTR, early and often, that American pressure to liberalise the Thai financial sector during the early 1990s resulted in the Bangkok International Banking Facility (BIBF). As much as any other single factor, US-dollar-denominated loans taken under the BIBF by firms with baht revenues accounted for the 1997 financial crisis.

It is also important to note that Washington’s current lead negotiator on the proposed FTA, Assistant United States Trade Representative for the Asia-Pacific (and for Pharmaceuticals) Barbara Weisel, brings immense knowledge and sophistication to her task. She very well may, in fact, have thought through Thailand’s trade position and international economic interests more rigorously than the Thai officials whom she has faced across the negotiating table. Her job does not, however, include looking out for those interests. Nor can her grasp of economic issues be expected to extend to other realms of Thai life that the FTA would affect.

For it needs bluntly to be pointed out that compliance with the US-Thai FTA of which Weisel, the American economic interests she represents and the American Chamber of Commerce in Thailand (AmCham) dream will require transformation of many domains of Thai life as it has long been known. That in a number of those domains, Thailand has not yet returned to a stable, pre-1997 equilibrium empowers those foreign interests. The smaller, pre-crisis American business community in Thailand understood the country and appreciated its sensitivities far better than today’s. This change helps explain the audacious nature of some of its demands for the FTA. What is harder to explain is current Thai reluctance to call that audacity what it is. This reluctance may or may not also reflect a continuing post-1997 lack of cultural and social self-assurance in Thailand. But it means the job of debating the FTA has been left largely to rather utopian non-governmental organisation (NGO) activists. They have made many valid points in their cautionary attacks on the proposed agreement. Those attacks have, however, not yet served the cause of clear debate well, for several reasons.

First, the polarising effect not only of the crisis precipitated by Prime Minister Thaksin Shinawatra’s scandalous sale of Shin Corp to Singapore’s Temasek Holdings, but also indeed of his very approach to government during the past five and a half years has made rational discussion of public-policy issues almost impossible.

Second - and compounding the problem - the Thaksin government and Thai advocates of the FTA have, through cowardice or incompetence, failed to make a case for the agreement.

One particularly important example of this failure lies in the area of extended intellectual-property protection for pharmaceuticals. In fact, the global pharmaceutical industry’s determination to secure such protection relates to Thailand’s aspiration to become a leading biomedical research hub. The industry expects such a hub to take its side in the protection of patent rights, which it considers the foundation of pharmaceutical innovation. This perspective has never surfaced in local debate over the FTA, nor have the possibility of Thailand’s emergence as a biomedical research hub and the benefits that that development might bring to the Thai economy. The failure of local advocates of the FTA to make their case in detail and with honesty helps explain the efforts of Washington’s representatives to educate the Thai public themselves.

Third, by holding themselves above electoral politics and not offering a progressive alternative to urban poor and rural voters, NGO activists and their sympathisers have similarly failed the country. They have ceded those voters’ support to the Thai Rak Thai Party. And they have dodged the need to make a compelling, detailed, comprehensive case against the FTA and for their own vision for the future of the Thai economy in the global arena. Instead, they confuse talking to each other with contributing to the public good in a democratic society.

Fourth, enemies of the Thai-US FTA, no matter what its eventual content, have too rarely admitted they now seek to close the barn door after the horse has already run off. Because trade experts - and, tacitly, Bangkok’s business elite - understand that the Thai-Chinese FTA in effect since 2003 is far more disadvantageous to Thailand and those Thai values and interests that NGOs here seek to protect than anything now demanded by the USTR and AmCham.

Fifth, ever since His Majesty King Mongkut and Chaophraya Si Suriyawong (Chuang Bunnag) negotiated the Bowring Treaty with the United Kingdom in 1855, Thailand has been integrated into the world economy. Some economic historians have argued that in comparison with Japan, for example, the terms of Thailand’s integration condemned it to sustained underdevelopment and only ersatz industrialisation. Other observers credit Thailand showing remarkable flexibility in adapting to the demands of the world economy and achieving prosperity and growth.

Failure to conclude an FTA with the United States would not bring this historical pattern of integration to an end overnight. But it is worth recalling that prior to the Bowring Treaty, Thailand’s international trade was largely with China and very much on China’s terms. Concluding an FTA with China but not the US may well drastically limit Thailand’s flexibility in the future, especially as China grows more and more powerful and aggressive in regional affairs.

Should Thailand conclude an FTA with the United States? At this time, a good answer is impossible. And such an answer is not even desirable. For perspective, clarity, and debate have not yet been brought to bear on the real costs and potential benefits that an FTA would involve. The maturity, responsibility and sophistication that speakers and listeners alike demonstrated night after night in the anti-Thaksin rallies this year have been sorely missing from discussion of the agreement. But during both the negotiation and ratification phases of any Thai-US FTA and on the part both of the government and the public, clear, cogent and serious debate is clearly possible and clearly necessary.

Michael J Montesano is an assistant professor in the Southeast Asian Studies Programme at the National University of Singapore and visiting researcher in the Regional Studies Programme at Nakhon Si Thammarat’s Walailak University.