Thai-US free trade talks stuck on finance sector

Bangkok Post, 23 November 2005

Thai-US free trade talks stuck on finance sector

The latest round of bilateral free trade negotiations between Thailand and the United States in London hit a serious snag over how much to liberalise the sensitive finance sector, one of the negotiators said.

Naris Chaiyasoot, director-general of the Fiscal Policy Office, told official Thai News Agency the two sides still have significant differences over the very basics of financial sector liberalisation under a proposed free trade agreement (FTA). The US found many proposals by the Thai side unacceptable at the London talks.

He said the US side refused to acknowledge Thailand’s sensitivities over a range of matters: the control of capital outflows in the face of a current account deficit; measures to maintain financial and macro-economic stability; and controls over remittances and transactions as a deterrent against criminal business activity.

TNA said that because of the serious implications of these issues on other areas of the economy, both sides had agreed to invite specialists and experts to take part in the next round of talks. The next round of "intensified" talks will take place in Thailand in January.

Dr Naris said FTA negotiations so far had failed to produce sufficient benefits for Thailand in other areas to warrant further tradeoffs in the financial sector.

Despite their many differences, Dr. Naris said there had been enough common ground to prepare a first draft on the liberalisation of the financial sector under the FTA. These included definitions of financial service, transparency, disclosure, and a mutual regulatory system.

source: Bangkok Post