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Thailand, Pakistan bid to finalise FTA in 2017

The Nation, Thailand

Thailand, Pakistan bid to finalise FTA in 2017

By Pravit Rojanaphruk

18 August 2015

Thailand and Pakistan are seeking to conclude a free-trade agreement by mid-2017 in a bid to reduce over-reliance on the traditional export markets of both nations.
The FTA negotiations will begin late next month.

"I am confident that after the conclusion of negotiations, the Pakistani-Thai FTA will be beneficial to both countries and will double our bilateral trade and investment to US$2 billion in due course," Commerce Minister General Chatchai Sarikulya told Pakistani businessmen in Islamabad before a business-matching session last week.

Last year, Thailand enjoyed a trade surplus of US$736 million with Pakistan and similar annual trade surpluses have been registered by the Kingdom since 2010. Bilateral trade reached $1.02 billion in 2014, and Pakistan is Thailand’s second-largest trading partner in South Asia after India.

Chatchai said the FTA would enable Thailand to expand its exports into South Asia as well as other Muslim nations in the surrounding region.

"The Commerce Ministry has a strategy to reduce export risks," Chatchai told a group of Thai reporters in Islamabad last week, adding that Pakistan, East Africa and the Middle East were new markets for Thailand.

The eight member states of the South Asian Association for Regional Cooperation - Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka - will become more accessible too once an FTA with Pakistan is concluded, he said. The group has a total population of almost 1.6 billion.

Pakistan alone has a population of 180 million.

Chatchai said some Thai products were already popular in Pakistan but a lot of them came through third countries such as Malaysia and the United Arab Emirates.

"The FTA will be an important tool for using Pakistan as a good base [to export] to South Asia and the [surrounding] region. [Pakistan] also has important raw natural resources such as fish and gems," he said.

Thai gateway

"Pakistani businessmen in Karachi, where 60 per cent of the country’s businesses are located, told me they wanted to see an FTA so they could trade directly."

The minister said Pakistan would also like to use Thailand as an export gateway to the Asean region, for which Thailand was ready in terms of its location and logistical infrastructure.

Asked if the administration of Prime Minister Prayut Chan-o-cha would be around to see through the FTA deal by 2017, Chatchai said it did not matter, as the military-led government must lay down foundations to expand Thai exports.

Back in 2013, Thailand’s democratically elected prime minister, Yingluck Shinawatra, visited Pakistan and agreed with her counterpart to establish a joint trade committee to strengthen economic cooperation.

The third meeting of that committee took place last week in Islamabad with Chatchai as head of the Thai delegation.

Pakistani Commerce Minister Khurram Dastgir Khan said both sides were "very keen" to see an FTA and there existed great complementary stages of economic development in the two countries.

The top five Thai exports to Pakistan are automobiles, parts and accessories; chemical products; polymers of ethylene in primary form; synthetic filaments and staple fibre; and rubber products. Pakistan exports mostly fresh seafood, crude and refined oil, cloth and animal products to Thailand.

Khan said a lot of trade might not be visible but it would become more organised once the FTA is concluded.

He also stressed that the pact would open doors to Asean.

Some Thai businesspeople who joined the business matching last week told The Nation that the lack of a Thai bank in Pakistan, security concerns and visa difficulties were some of the issues hindering smoother trade with that country.

One Thai businessman who asked not to be named said a single-industry business-matching session would be helpful in facilitating more trade.

Thai Airways International currently flies to Karachi, Lahore and Islamabad.

Tomwit Jarnson, the Thai Ambassador to Pakistan, said more Pakistani tourists are visiting Thailand, with more than 80,000 entering the Kingdom last year. Seaside destinations such as Pattaya and Phuket are popular with them.