Thai-Japan FTA: Talks stall over vehicles, parts

The Nation | Bangkok | 3 September 2004

THAI-JAPAN FTA: Talks stall over vehicles, parts

Auto sector very important, Tokyo says

Wichit Chaitrong

Free-trade talks with the Japanese have stalled after Tokyo complained about Thailand’s reluctance to open its markets to Japanese cars, car parts and metals.

Pisan Manawapat, deputy permanent secretary of the Foreign Affairs Ministry and head of the Thai negotiating team, said the Japanese side said if Thailand wanted the FTA negotiations to advance, it should commit further to opening up these markets, which Japan sees as particularly important.

On the other hand, the Japanese negotiators would like Thailand to make a “modest” proposal for the opening of Japan’s markets for sugar, rice, chicken, tapioca and footwear, Pisan said.

“Thailand should explain clearly how Japanese farmers would benefit from opening up their markets to Thai farm products,” he quoted the Japanese side as requesting.

Three rounds of talks have been held on a free-trade agreement and the next one is scheduled for September 13-15.

Pisan was outlining the progress of negotiations to a seminar on the Thai-Japan FTA held yesterday by the Fiscal Policy Research Institute.

Japan has been sensitive to opening up its farm markets but Thailand has insisted that the FTA talks would not progress without agreements on the farm sector.

Pisan said Japan would like to participate in the financial industry here but was told that it is not yet ready for full liberalisation as the Bank of Thailand is still working on a financial master plan for the sector.

Wisarn Pupphavesa, an economist at the National Institute of Development Administration, said Thailand stood to benefit more from an FTA with Japan.

The Thai industries that might be affected by an FTA are transport equipment, mining, metals and chemicals, while producers of Thai processed foods, grains and meat should gain from it, he said.

“If we were to really benefit from the FTA with Japan, we should ask Japan to open up its fishery industry or farm sector equal to what it has offered to Singapore. Japan should also open up its labour market to Thailand equal to what it has offered to Australia,” Wisarn said.

Kenichi Kawasaki, an economist from Japan’s Research Institute on Economy, Trade and Industry, also said an FTA should benefit Thailand more than Japan.

He estimated that Thailand’s gross domestic product should expand by 20 per cent once the FTA is fully implemented, while Japan’s GDP would grow only 0.2 per cent.

The FTA would also help increase trade and investment into Thailand from Japanese and other foreign companies, he added.

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source: The Nation