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Thaksin pushes Thai-Japan FTA

Business Day, Bangkok

10 September 2004

Thaksin pushes Thai-Japan FTA

staff writer

PRIME Minister Thaksin Shinawatra, pictured right, said he has asked the Japanese government to help develop a Thai-Japan free trade area (FTA) agreement with Thailand agreeing to Japan’s plan to set rice and beef as sensitive products categories.

“I will not export beef and rice to Japan since I do understand Japan’s internal problems,” Thaksin said in a speech to the Thai-Japan Association in Bangkok on Thursday.

He added that normally, the taxes on sensitive products are not cut as much as those of other category goods and the sensitive products might be protected by keeping their tax rates unchanged for a certain period of time.

A Thai-Japan FTA has not yet been concluded because Japan wants Thailand to liberalize trade of automobiles, autoparts, steel and financial services. Thailand, on the other hand, is demanding that Japan open its market for rice, tapioca, chicken meat, sugar and fishery products but Japan has yet to make a decision on this.

Thaksin said the FTA will help generate benefits for both countries but Japan does not want to open its market to Thailand’s agricultural products because it is afraid that such a move will hurt Japanese farmers.

Thaksin suggested that the best way to protect Japanese farmers’ benefits is to increase the farmers’ income.

“Instead of implementing a price subsidy program on agricultural goods, it would be better to create free competition and then create more income for farmers,” Thaksin said.

He added that Japan has about one million farmer families and its income support program will need to be reduced.

“In doing so, the Japanese government would have to spend not more than US$4 billion a year,” he said.

He said that the disadvantage of the agricultural products price subsidy program is that cost of living in Japan is high and Japan will lose an opportunity to earn more foreign income from the tourism industry.

He added that trade liberalization in agricultural goods will offer a chance for the Japanese to consume a range of high quality and diverse products at a cheaper price.