Yahoo | 29 September 2023
Thailand’s new PM seeks FTA expansion to lure major foreign investors
by Panu Wongcha-um and Panarat Thepgumpanat
BANGKOK (Reuters) -Thailand’s new prime minister said on Friday he was committed to transforming the country into a major foreign investment destination, including pursuing more free trade deals and expanding manufacturing of both electric and traditional autos.
In a wide-ranging speech at a forum, Srettha said his government would improve infrastructure and water management, upgrade airports to boost tourism, expand free trade agreements (FTA) to compete with neighbours, and make it easier for companies to hire more foreign workers in Thailand.
"Thailand is open for business with all countries," said Srettha, a political neophyte who until recently headed a high-end real estate firm.
"We will give importance to negotiating more FTA, we are losing to Vietnam not because of the wage issue, but because we have fewer FTAs."
Despite its economy being heavily reliant on exports, Thailand has lagged its peers in pursuing trade pacts with major markets, with complications ranging from allegations of protectionism and migrant labour abuse, plus political upheaval stemming from governments being forced from power.
Srettha stressed foreign policy would be neutral and not take sides with the United States and China, adding that Japan was a major power that Thailand was committed to, given its long history as the country’s top investor.
He said he was making efforts to draw electric vehicle (EV) makers to the country, a regional auto-assembly hub, but would not neglect manufacturing of internal combustion engine cars, in an assurance to companies from Japan, for years the key driver of its car manufacturing industry.
Thailand is expected to benefit from the switch to EVs, including through Chinese investments worth $1.44 billion since 2020 - by companies like BYD and Great Wall Motor - which have opened a new front in a market Japanese automakers historically dominated.
The Chinese wave is already beginning to reshape Thailand’s auto industry, as Chinese EVs combine their own suppliers with local Thai firms - including some with longstanding links to Japanese companies.
"While we support the EV industry, we will also support traditional car manufacturing which is still important over the next 10 to 15 years," Srettha said.
"We will make Thailand a hub for the last phase of traditional car manufacturing," he said.
Srettha, an ally of the politically influential billionaire and former premier Thaksin Shinawatra, came to power following a once-unthinkable alliance with parties backed by a military that has repeatedly intervened against his populist Pheu Thai party’s governments.
He stressed the need to expand markets for Thailand’s agriculture goods and to support farmers long laden with debt, but stressed there would be no policy of price guarantees for their produce as with previous Pheu Thai governments, unless in the time of crisis.