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Thai industrial sector asks preconditions to US FTA pact

MCOT News, Thailand

Thai industrial sector asks preconditions to US FTA pact

29 January 2006

BANGKOK, Jan 29 (TNA) - The Federation of Thai Industries (FTI) has urged the government to reach an agreement regarding the origin of raw materials and quality standards of Thai-produced goods with US trade negotiators before signing a Thai-US free trade area (FTA) agreement with Washington.

Nilsuwan Leelarusmi, a representative of the FTI, said the two crucial issues must be settled prior to any agreement to be signed as Thai exports to some countries with FTA accords nonetheless encountered problems such as trade protection practices, despite tariffs being lowered.

The US is quite strict regarding imports, Mr. Nilsuwan said, as it requires that finished products, including raw materials used in the production, must have certificates of origin within the country and that components be manufactured by the country itself.

Thailand, however, believes that some raw materials needed for certain stages of production must be sourced from outside the country in order to save manufacturing time, he said.

Washington is also very strict on quality standards for manufactured and processed goods, and it has raised its own standards of hygiene, chemical residues, the environmental impact of the manufacturing process and labour conditions during trade negotiations.

All the negtiations will be to no avail if Thailand and the US sign an FTA and Thai exporters still find difficulty in exporting goods to the US because its quality standards do not meet US requirements, he said.