Thai side floundering in FTA talks

IHT ThaiDay, Bangkok

Thai side floundering in FTA talks

By Daniel Ten Kate

15 January 2006

More than anything, this week’s trade talks and the howls of opposition they’ve provoked have spotlighted the starkly different approaches taken by Thai and US negotiators.

A public debate on controversial items in the trade deal, particularly provisions dealing with medicine, should have taken place in Thailand before the negotiations began 18 months ago. But that never happened, and now a backlash is playing itself out in massive street protests, newspaper columns and - soon enough - courtrooms.

“The government didn’t do its homework,” said Thitinan Pongsudhirak, a professor at Chulalongkorn University. “It’s interesting that the US negotiators say they respect democracy and welcome all voices. Now the Thai government is trying to listen as well, but they are too late. Now whatever they do will be treated with suspicion.”

As Thai negotiators are finding out, the US Trade Representative (USTR) is a formidable opponent. It has well-researched policy positions, a press team available at the touch of a Blackberry and - most importantly - a legal framework approved by the US Congress that specifies exactly what a trade deal needs in order to be a success.

“We don’t want to bother going through the effort to conclude an agreement that won’t be approved by Congress,” Barbara Weisel, the top US negotiator, told reporters in Bangkok yesterday. “It would be a waste of both of our times.”

US negotiators are leveraging the US Congress in order to pressure the Thai side into closing the deal. The intentionally vague “spring” deadline set by US negotiators is given under the assumption that the US Congress will not extend a law, known as Trade Promotion Authority (TPA), that allows the USTR to negotiate deals that will receive an up-or-down vote in the US Congress.

Without TPA, which is set to expire in June 2007, members of the US Congress can go line-by-line and change parts of the trade agreement they don’t like. That creates enormous headaches for negotiators, which is why the USTR has not sent any trade deals to Congress for approval without TPA firmly in place.

The US Congress can always extend TPA, as it did last year, but Weisel said earlier this week that there are “serious questions” as to whether that will happen. In 2007, US lawmakers will be preparing themselves for the notoriously protectionist US presidential election campaign, and US President George W Bush will be fighting off lame-duck status.

In any case, TPA is an invaluable tool in the negotiating room. On any given item, US negotiators can simply tell their Thai counterparts that they cannot budge because Congress won’t let them.

“The talks are really just to comfort the Thai side psychologically and give them the impression they have the right to negotiate,” Bantoon Saertsirot, an advisor to the Senate Committee on Foreign Affairs and an observer of the talks in Chiang Mai, told reporters yesterday. “It’s like giving someone a steak, and letting them choose between pepper and salt, but telling them that they still must eat the steak.”

By contrast, the Thai team is left floating up the river. Free trade agreements here are negotiated by the executive branch on behalf of the country, and do not need the approval of Parliament to become binding.

While the USTR deals with all US trade deals, the Thai negotiating apparatus lacks any sense of cohesion. The US FTA, as well as the trade deal with Japan, fall under the control of the Foreign Ministry, while all other deals fall under the Commerce Ministry’s Department of Trade Negotiations.

To further complicate matters, Prime Minister Thaksin Shinawatra has said Commerce Minister Somkid Jatusripitak is now in charge of the US FTA talks. And then Somkid reportedly sent his aide Uttama Savanayana, a vice minister for commerce, to oversee the talks this week in Chiang Mai.

All of this leads to a fuzzy decision-making process that has undoubtedly frustrated US negotiators. Razeen Sally, a trade expert at the London School of Economics, has called previous Thai trade pacts “ill-prepared and rushed.”

“Lack of preparation and strategy on the Thai side contrasts starkly with the vast resources and mobilization of an experienced and fearsome US trade-negotiating machine,” he wrote in a recent report. “Hence negotiations are very lopsided and could easily result in a one-sided deal. This has caused a domestic backlash.”

The Chiang Mai protests are one manifestation of that. The concerns expressed by the opposition Democrat party, various local think tanks and plenty of academics are others.

Yet the largest challenge could come next week in the form of a lawsuit to the Constitutional Court challenging the government’s ability to sign FTAs without receiving parliamentary approval. An affirmative decision could strike at the heart of the democratic process in Thailand and invalidate the previous six rounds of talks - an obstacle at this point that must astonish Congress-beholden US negotiators.

“The merits of an FTA with the US may be good, but the process has been so opaque,” said Chulalongkorn’s Thitinan. “Thaksin’s top-down approach has lost the trust of the people.”

source : IHT ThaiDay

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