Bangkok Post

Trade negotiators keep secret on latest steel proposals

By Woranuj Maneerungsee

5 May 2005

The Thai team overseeing the free trade agreement negotiations with Japan have reached agreement on the controversial issue of liberalisation of steel, according to a source close to the national committee overseeing the talks.

But the latest proposal, approved earlier this week by a committee chaired by Somkid Jatusripitak, the deputy prime minister, has been sealed, with only four people aware of the details.

’’We have to [keep the steel proposal secret] because we don’t want to have a leak affecting the talks. Our counterparts up to now have known what we are considering before we even sit down at the table,’’ the official said.

Removing tariffs on high-quality steel imports under the Thai-Japanese FTA has been one of the more controversial points of the ongoing talks.

Commerce Minister Thanong Bidaya, indicated shortly after being named to the cabinet in March that he was willing to cut tariffs for hot-rolled steel under the FTA as requested by Japanese officials.

But Thai negotiators, led by Pisan Manawapat, have privately questioned whether Mr Thanong’s statements had undermined the country’s negotiating position.

The latest position taken by Thailand on the issue of steel are now known by just four persons: Mr Somkid, Mr Thanong, Mr Pisan and Chakramon Phasukvanich, the industry permanent secretary who drafted the Thai position on steel.

Officials privately expressed confidence that the new proposals would be satisfactory for all stakeholders, steel producers and end-users alike.

The proposal would be revealed on the table during the next round of the Thai-Japanese trade talks, scheduled to be held only if Tokyo agrees to enter into further talks on farm products.

The seventh round of the FTA talks took place in Thailand last March.

Prime Minister Thaksin Shinawatra recently called on Tokyo to further open its market for agricultural products, a highly sensitive topic for Japan.

Thai executives say that current offers from Japan on farm products have been insufficient, particularly in the areas of chicken, sugar, canned pineapple, rice products, and cuttlefish.

Thai officials say they want greater farm concessions in exchange for agreeing to accelerate opening up the manufacturing sector. Japan wants Thailand to scrap import tariffs on steel, a key material for the auto industry.

Japanese negotiators are also pushing for Thailand to ease tariffs on the imports of CBU (completely built-up) cars and auto parts.

Thai officials have agreed to consider the issue of steel separately from that of cars and auto parts, both of which will be considered in later negotiating rounds.

Mr Somkid has indicated that he wants to conclude the first phase of the Thai-Japanese FTA by July.

Representatives from the Board of Trade of Thailand and the Federation of Thai Industries plan to hold a briefing today to air their concerns regarding the Thai-Japan FTA.

Mr Thaksin meanwhile is scheduled to meet with the head of Japan’s Ministry of Economy, Trade and Industry tomorrow to discuss the latest positions in the trade talks.