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Thai private sector against Japan trade deal

MCOT News, Thailand

Thai private sector against Japan trade deal

6 April 2005

BANGKOK, April 6, (TNA) - Thailand’s private sector has warned the government that several of the country’s industries are too weak to cope with the impact of a free trade agreement with Japan.

Thai businesses are concerned about the rule of origin clause in the proposed bilateral agreement, whereby Thai exports to Japan must contain at least 40 % of local content to qualify for lower tariffs, according to the Deputy Secretary-General of the Thai Chamber of Commerce, Pornsilp Patcharintanakul.

Thailand’s private sector cannot accept the local content requirement clause because many Thai exports, including steel, jewellery made from gold, diamonds, goods based on aluminium and copper, petrochemicals and garments, contains up to 60% of imported raw materials, he said.

A 40% local content requirement would represent a protectionist measure in the eyes of Thailand’s private sector, he said.

Thai and Japanese officials have just completed their seventh round of negotiations on the bilateral free trade agreement.

The Japanese have demanded that Thailand accept the local content requirement in exchange for lowering the tariffs on certain farm products.

The Thai Chamber of Commerce urged the Thai government to renegotiate the deal because, in their view, the local content requirement is more important than the tariff reduction.