Thai-US FTA talks: Deadlock looks set to be broken

The Nation, Bangkok, January 05, 2006

THAI-US FTA TALKS: Deadlock looks set to be broken

Thailand ‘to offer to open finance sector’.

Wichit Chaitrong

Thai finance officials will for the first time make an offer to open up the country’s financial services, which should make or break the proposed Thai-US free-trade agreement (FTA) during talks next week, says a Thai finance source.

The source said Bangkok would put forward “a minimum offer”, outlining to US officials the period needed before opening up the banking and insurance sectors, during the sixth round of Thai-US FTA negotiations in Chiang Mai next week.

The source refused to disclose the time frame to be stipulated but noted that the minimum offer should “make or break” the talks.

“This offer is all we can make at this point,” said the source, who is close to the negotiations.

He said the offer to liberalise financial services should lead to the conclusion of the talks.

“We should be able to see the end of the talks after the seventh round,” added the source.

A sixth round of talks between Thai and US officials are scheduled from January 9 to 13, aimed at creating a bilateral trade pact, with plans to wrap them up by the first half of this year. Prime Minister Thaksin Shinawatra and US President George Bush earlier indicated their intention to wrap up the deal by this spring, prior to the expiration of the US Trade Promotion Authority (TPA) in the middle of next year. The TPA gives the US Congress the option only to accept or reject a trade deal without the right to negotiate one.

The prospective Thai-US trade deal is comprehensive, and so next week’s talks will cover a wide range of issues: trade liberalisation, intellectual-property protection, labour, the environment, telecommunications and the main one of financial-services liberalisation.

The source said Finance Ministry officials were also working on the ministry’s version of a long-term financial-liberalisation master plan, which should serve as a guideline for opening up the financial sector under international trade deals. The ministry’s master plan is scheduled to be completed in March before being forwarded to Finance Minister Thanong Bidaya for approval.

Bank of Thailand governor MR Pridiyathorn Devakula said after meeting with Thanong yesterday at ministry headquarters that Thanong would call a meeting with him and other relevant parties next Monday during the upcoming talks.

At a separate meeting yesterday, Public Health Minister Pinij Charusombat said the government would allow imports of US beef from next week, on condition that the imported beef come with a certificate showing it to be free of mad-cow disease.

After a one-hour meeting with Agriculture Minister Sudarat Keyuraphan and senior officials from the Finance and Foreign ministries, he said Japan had earlier lifted its ban on US beef on the same condition of disease-free certification.

Meanwhile, Saree Aongsomwang, director of the Foundation of Consumers, said the civic group FTA Watch would hold a press conference today, to inform the public that 22 sectors would be affected by the prospective Thai-US FTA. He said, for instance, if Thailand allowed imports of US beef, Thai cattle ranchers would suffer, because the US government had strong resources with which to support its ranchers.

Earlier, Thailand banned US beef after authorities there discovered a case of mad-cow disease in Washington state on December 24, 2003.

Sudarat said at the time that Thailand had added the US to a list of 23 countries subject to the ban of beef exports, including the UK, Portugal, France, Ireland, Switzerland, Belgium, Germany, the Netherlands, Denmark, Austria and Canada.

Anyone convicted of smuggling beef imports from countries on the list are subject to imprisonment of from six months to two years or a fine of Bt5,000 to Bt20,000.

The Nation

source: The Nation