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Thai-Korea pact to cabinet

Bangkok Post | 19 August 2008

Thai-Korea pact to cabinet

Benefits expected in Asean framework


The free trade agreement between Thailand and South Korea will be submitted for cabinet approval today, paving the way for the two countries to officially sign the pact at the Asean economic ministers’ meeting scheduled for Aug 25-27 in Singapore.

While the bilateral pact is part of the Asean-South Korea free trade framework and was officially signed by the two governments, it will take effect only after the Thai Parliament ratifies it, according to Noppadon Sarawasi, deputy director-general of the Trade Negotiations Department.

Asean and Seoul began FTA talks in 2005. All Asean members except Thailand signed the agreement in May 2006 and it took effect two months later.

Asean comprises Brunei, Burma Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Thailand had declined to sign the Asean-Korea FTA over differences in Seoul’s treatment of some agricultural products, particularly rice and livestock.

After almost a year of negotiations, Thailand concluded the talks with Seoul under the Asean-Korea free trade agreement (AKFTA) last December after Seoul allowed an extension for import tariff reductions on Thai goods from 2010-12 to 2016-17.

Thai items given extensions for tax cuts and/or waivers include steel and steel products, cosmetics, raw hides, tanned leather and leather goods. Other products that would benefit from Seoul’s pledged tariff cuts include electrical appliances, particle board, plywood, cane molasses, yarn, frozen shrimp, tapioca starch and squid.

South Korea is Thailand’s eighth-largest trade partner, with bilateral trade value of nearly US$7 billion.

According to Mr Noppadon, Thailand, as the sole Asean member that did not sign the AKFTA in August 2006, has lost its competitiveness to other Asean members.

For instance, for yarn in textile products, goods from Thailand face a 20% tariff in South Korea compared with only 5% levied on other Asean countries.

 source: Bangkok Post