logo logo

Somkid: FTA with Japan hinges on rule changes for farm goods

The Nation, Bangkok

Somkid: FTA with Japan hinges on rule changes for farm goods

11 August 2005

By Jeerawat Na Thalang

Commerce Minister Somkid Jatusripitak - under pressure from local businesses - yesterday assured them that the government would not sign a free-trade pact with Japan unless it is satisfied with terms concerning rules of origin for farm goods. Officials from both governments are scheduled to resume talks soon on the final details - rules of origins - which would ensure better access for farm goods to the Japanese market. Currently, restrictive rules of origin block many Thai exports from access to the market.

“The agreement should balance the interests of both sides,” Somkid said at a seminar entitled “Thai-Japanese FTA, Did Thailand Win or Lose?” held yesterday at the Nai Lert Park Hotel in Bangkok.

“We have a clear policy to not sign the agreement unless our farm products can gain access to the Japanese market.”

For example, under the prospective Thai-Japanese trade pact, rules of origin would require that tuna be caught in Thai or Japanese waters, and that Thai fishermen make up at least three-quarters of fishing-trawler crews in order for the fishery products to qualify for trade privileges.

But Pisan Manawapat, head of the Thai negotiating team, said Bangkok would not agree to such quantifiable measures.

“It doesn’t matter where the fish originates. It should depend whether such products have been sufficiently processed in both countries,” he said.

About 500 farm and fishery products with a combined export value to Japan of Bt42 billion are at issue under rules of origin.

At present, Thailand exports Bt94 billion in farm and fishery goods to Japan, Bt72 billion of which would be covered under the FTA.

Pisan said that with clear regulations on market access, farm exports to Japan should grow more.

Negotiators have asked their Japanese counterparts to review their rules of origin. The officials are due to go over these product-by-product during the last stage of discussions.

Still, Pisan said he’s optimistic. “It’s not much of a challenge. Japan’s trade minister Shoichi Nakagawa already promised to amend rules of origin to improve market access for Thai agricultural goods,” he said.

Bangkok and Tokyo reached a broad agreement on the FTA early this month and expect to sign a trade pact by next April and implement it by September 2006. But rules of origin issues remain to be sorted out.

Pisan said earlier this month that he refused to sign a “record of discussion” with Japanese counterparts because he wanted to see clear regulations from Tokyo on how to improve farm market access. He said he would be able to sign the record of discussion on September 1, upon the expectation that the deal would be finalised by then.

Panellists from the public sector said Thailand should definitely gain rather than lose under the agreement.

Ampon Kittiampon, secretary-general of the National Economic and Social Development Board, said this was the first time that Tokyo had agreed in a trade pact to reduce sanitary standard barriers - a major achievement for the Thai agricultural sector.

“Price is not as decisive an issue as the sanitary requirements problem,” he said. In the past, the absence of a sanitary agreement has kept a number of Thai products from the Japanese market.

Chakramon Phasukavanich, permanent secretary of the Industry Ministry, asked local industries to take a long-term perspective. With or without an agreement, industrial tariffs will have to come down anyway under global trade rules.

The trade pact, meanwhile, will secure more long-term investments from Japan, he said, urging local industries to adjust their industries to benefit from the deal.