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Thailand calls for deepening ties under FTA

Thailand calls for deepening ties under FTA

Our Bureau

New Delhi , Sept. 19, 2005

THAILAND has advised India not be deterred by the "aftershocks" of a tariff reduction on products under the Early Harvest Scheme in the Indo-Thai Free Trade Agreement (FTA) initiated in September last year. Both countries should resolve to deepen their trade engagements to optimise the benefits under the FTA, said the visiting Thai Trade Representative, Mr Prachuab Chaiyasan.

Mr Chaiyasan was addressing a seminar on `Maximising Trade and Investment Opportunities: India-Thai Synergies after FTA’, organised by the Federation Indian Chambers of Commerce and Industry (FICCI) in the Capital on Monday.

Mr Chaiyasan, who also heads the Thai Negotiating Team on India-Thai FTA, said, "The accrual of benefits to Thailand from tariff reduction under the Early Harvest Scheme (EHS) should not mean that we stop trading. In fact, we should move from the 82 items under EHS to another 82 and identify products that benefit Indian trade and industry."

In August last year, the two countries signed a protocol within the framework of the FTA to allow 82 items enjoy concessional tariffs from the following month. The protocol is called the Early Harvest Scheme and the items include electronic components, grapes, apples, precious stones and articles of jewellery.

Responding to the observations by the FICCI President, Mr Onkar S. Kanwar, the Thai trade representative said, "The FTA needs to be seen as a Fruitful Trade Arrangement, which is not only fair but leads to mutual benefit to both the trading partners."

He said tariff reduction was not the main focus of the FTA. The two countries need to work together to remove non-tariff barriers and ensure that the FTA becomes a channel through which there is free flow of capital. This will be an important step towards establishing business-to-business contacts for deepening commercial ties, said Mr Chaiyasan.

He said the new trading network was broader and more sophisticated. Investment has become an important component of economic relations and services such as IT and tourism and areas such as biotechnology and civil aviation will gain in importance.

Mr Chaiyasan said the two countries are in the process of negotiating details under the framework agreement, including trade in goods and services, investment and economic co-operation.

The FICCI President underlined the need for strict enforcement of the Rules of Origin to maximise the gains from the FTA and avoid trade deflection to favour a third country. He requested the Thai delegation to convince its authorities to continue with the `twin criteria’ of the Rules of Origin for the `normal track’ products as in the case of early harvest products.

Mr Kanwar said the total trade between the two countries now stands at $1.7 billion but Thailand’s share in India’s total exports and imports is just 1 per cent and 0.8 per cent respectively. Even in terms of FDI inflow into India, Thailand ranks only 27th.


 source: Hindu Business Line