Taiwan concerned about exclusion from Thai FTA
BIG BUCKS: Official tallies from Thailand indicate that Taiwanese investment approved by the Thai government reached as much as US$11.6 billion at the end of 2005
STAFF WRITER, WITH CNA
Wednesday, Nov 28, 2007
Taiwan expressed concerns on Monday over the possible impact on the country resulting from its exclusion from Thailand’s free trade agreement (FTA) network.
A Taiwanese representative to the World Trade Organization (WTO) raised the issue during a WTO trade policy review session on Thailand.
The representative said that Thailand’s granting of favorable tariff rates to its FTA partners but not to others could be in violation of the non-discrimination principle under the WTO’s multilateral trade framework, and urged Thailand to address the matter.
Thailand has been actively seeking to establish regional or bilateral trade agreements in recent years.
For example, Thailand, which is a member of the Association of Southeast Asian Nations (ASEAN), is taking part in FTA talks with several of ASEAN’s dialogue partners, including Japan, China, South Korea, Australia and New Zealand.
Meanwhile, bilateral FTA talks are underway between Thailand and Peru and India, while talks with the US and EU are expected to be resumed after the new government of Thailand is formed after the Dec. 23 parliamentary elections.
According to a report prepared by the WTO Secretariat, Thailand’s economic fundamentals remain sound, but the Thai government’s ability to restore private investor confidence and to proceed with pending structural reforms are key challenges for the country’s future economic performance.
Tallies from Taiwan’s Bureau of Foreign Trade show that bilateral trade between Taiwan and Thailand increased from US$4.93 billion in 2003 to US$5.98 billion in 2004 and further to US$6.59 billion in 2005.
During the first nine months of last year, trade between the two countries amounted to US$5.82 billion, according to the tallies.
Meanwhile, official tallies from Thailand indicate that Taiwan investment approved by the Thai government amounted to US$11.6 billion as of the end of 2005, making Taiwan the third largest foreign investor in Thailand after Japan and the US.
Also during Monday’s session, Taiwan expressed concerns over Thailand’s plan to amend its Foreign Business Act.
According to draft amendments approved by the Thai Cabinet in January this year, the definition of a foreign company would be modified to include firms in which more than half of the voting rights are held by foreign nationals.
Under existing law, foreign business entities are defined as juristic persons in which more than half of the shares are held by foreign nationals.
While recognizing Thailand’s policy to cut tariff rates for certain products, Taiwan suggested that Thailand expand the scope of its bound tariff rates to make trade more predictable, noting that Thailand has set bound rates for only approximately 70 percent of non-agricultural imports.