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What’s the rush to ink FTA with Japan?

Bangkok Post | 2 April 2007


What’s the rush to ink FTA with Japan?

Critics of tomorrow’s signing say the interim Thai government has broken promises and failed to reveal details of the pact, but the biggest question they have is why Surayud is in such a hurry


The signing is still scheduled for tomorrow, but criticism persists why Prime Minister Surayud Chulanont, as head of a transitional government, has pushed ahead with his intention to sign the Japan-Thailand Economic Partnership Agreement.

Whether or not the country has become less divisive _ one of the four missions, cited by the Sept 19 coup makers for staging the putsch, which were supposedly to be carried out by the Surayud Chulanont government _ is up for debate. What was not consistent between what the government pledged to do and what it actually delivered was its promise, made in the first month of the interim administration, to halt all negotiations involving free trade agreements, or FTAs, with other countries.

It plans to now sign a bilateral trade pact with Japan in Tokyo tomorrow in a ceremony to be witnessed by the prime ministers of both countries.

While the government and Thailand’s industrial sector welcome the pact, saying industrial goods, agricultural products, textiles and jewellery would gain advantages under the agreement which will reduce Japanese import tariffs, there are worries the Thai-Japanese FTA will force Thailand to open its markets to Japanese exporters and some industries could lose out in the process.

Non-governmental organisations (NGOs) and academics, both here and in Japan, strongly oppose the pact on the grounds the agreement will allow Japan to export industrial waste to Thailand. There are also concerns the permitted patenting of micro-organisms could amount to bio-piracy.

Although the pact’s negotiators refute these concerns, scepticism remains because the text of the Japan-Thailand Economic Partnership Agreement (JTEPA) is only available to a limited number of people.

The NGOs, led by FTA Watch, filed a petition to the Administrative Court to suspend the signing of the deal because officials failed to disclose information about the pact to the public. The court, however, turned down the request, ruling the case was outside its jurisdiction.

The Supreme Court used similar reasoning when it rejected an appeal on Friday.

The bigger question, however, is what is the rush to sign the agreement? Why does this government, which is an interim one, have to commit the country now to a contract which will be in force for years to come?

The official answer is that as more countries sign FTAs with Japan, we cannot waste time or we will lose competitiveness in the world’s economy.

Critics, however, argue it is not so urgent. They contend the interim government has rushed ahead with the negotiations because it wants to be seen as being recognised by a major power. It doesn’t hurt either that Japan is a major creditor for desperately needed infrastructure projects in Thailand.

The critics also argue that the government feels the signing of the JTEPA will send a positive signal to foreign investors in general, and to the Japanese business community in particular, that Thailand is still available for commercial engagement, and that the government, despite its emphasis on the sufficiency economy, has not shut its door to globalisation.

If everything goes as planned, Gen Surayud and his counterpart Shinzo Abe will witness the signing of the legally-binding JTEPA, along with a non-legally-binding joint political declaration. The ministers of commerce and agriculture from both sides will also sign two other non-legally-binding cooperation declarations on that day.

Thailand will be the fourth country in the region to sign an FTA with Japan.

Japan will be the first country outside Asean to which Gen Surayud has made an official visit. He is also scheduled to visit China in late May. The coup-elected government has yet to make an appearance in a European nation or in America.

Critics argue that instead of bombarding the public with television and radio ads promoting the do-or-die necessity of signing the JTEPA, the government could have gained more credit by sharing information about the agreement and initiating a consultation process with the public during the past six months.

On the Japanese side, it looks like the Abe government risks compromising a chance to celebrate the 120th anniversary of diplomatic relations between Thailand and Japan on the theme of people-to-people contacts which it has promoted.

Sixteen Japanese NGOs said in a petition last week to His Majesty the King that they never want to pollute the soil of Thailand, one of Asia’s great agricultural nations, with industrial waste from Japan.

In February, a dozen Japanese NGOs appealed to their own government to drop the waste trade clause from the tariff reduction chapter, but Tokyo ignored the call.

The Japanese NGOs charged that the promotion of industrial waste trade was a result of collusion between the Japanese government and trans-national corporations to transform Asia into a dump site through the exploitation of economic partnership agreements.

Buntoon Srethasirote, a member of FTA Watch, said his group was not against the recycling business, but this pact allows the import of waste for disposal.

That is unlike the Thai-Australian FTA, which allows trade of waste and scrap derived from production in the territory of one side, or used goods collected in that territory, provided such goods are fit for the recovery of raw materials.

Concerned agencies, such as the Pollution Control Department and the Department of Industrial Works, however, assure the Thai public that measures are available to deal with any JTEPA-related waste problems.

Deputy Prime Minister and Industry Minister Kosit Panpiemras said Thailand could lose advantages over Vietnam and Indonesia if it fails to sign the pact with Japan, because the reductions in tariffs will help Thai exporters to better compete in the Japanese market.

But Akio Kawamura, professor of intercultural studies at Kobe College, said Thailand should not fear competition from Asean countries more than from China which is now exporting not only chicken and other farm produce to Japan, but also industrial and handicraft products.

He said civic groups in Japan are watching closely to see if the JTEPA will aggravate certain social woes in Japan.

With visa applications becoming easier under the deal, certain workers will be able to exploit loopholes and enter Japan as migrant workers, if not sex workers, he said.

Thammasat University economics professor Somboon Siriprachai said the government seems to be trading its own political recognition against the long-term economic interests of the nation. If this turns out to be the reason for the signing, it would be a pity, he said.

Mr Somboon said he did know why the signing had to be signed so urgently.

He cited as an example the classic FTA case of the North American Free Trade Agreement. Decades after it went into force, debate still rages whether or not the pact benefits or hurts less economically prosperous Mexico.

Democrat party vice-leader Kiat Sitthi-Amorn warned that signing the JTEPA would widen the rifts within society.

’’Why do we have to rush into it when a lot of lessons from the FTAs with China and Australia have yet to be learned and many problems have yet to be solved?’’ he said.

 source: Bangkok Post