Bangkok Post

Initial phase of talks with Tokyo to be wrapped in July, says Somkid

4 May 2005

WICHIT CHANTANUSORNSIRI

Agreement on the initial phase of the Thailand-Japan free trade agreement is expected by July, according to Finance Minister Somkid Jatusripitak.

Dr Somkid said the first phase of the talks has focused on the broad outlines of the trade agreement. The second phase will then negotiate a proposed increase in the scope of liberalisation between the two countries, with more products and services brought into the agreement.

Dr Somkid said the first phase, however, would include agricultural products. He declined to offer details on this crucial point.

Thailand, one of the world’s largest agricultural exporters, is pushing hard for Japan to reduce tariffs and quota restrictions for commodities, including chicken, sugar and other products.

At the same time, Japan has called for lower tariff barriers on the steel and auto sector.

Dr Somkid said the FTA would include steel, but that the actual details and pace of liberalisation by Thailand remained to be settled.

’’If we cannot reach an agreement [on steel] in the first phase, then talks will continue on it in the second phase,’’ he said.

Sources close to the negotiators said details on the pace of liberalisation and types of steel to be covered remain to be finalised.

Thai authorities want to extend protection periods for the industry, to allow time for local mills to improve their competitiveness, while Japanese officials want immediate tariff reductions to help reduce costs for Japanese carmakers based in Thailand.

Assuming that talks on the initial phase are finalised by next month, the leaders of the two countries are expected to meet and sign the agreement in July.