Malaysia, Thailand eye border business zone

Malaysia, Thailand eye border business zone

Reuters,Langkawi, Malaysia

Malaysia and Thailand pledged on Sunday to deepen business and
government ties in an effort to boost trade and set a benchmark
for other Southeast Asian states considering the next stage of
regional integration.

Drawing parallels with the European Union, Malaysian Prime
Minister Mahathir Mohamad said Bangkok and Kuala Lumpur should
show the eight other ASEAN Free Trade Agreement (AFTA) countries
what could lie ahead for their alliance.

"While we work towards AFTA, we should also experiment with
greater integration between neighbouring countries on a bilateral
scale," he said in speech to a business forum attended by several
hundred delegates from Malaysia and Thailand.

"The cooperation between Thailand and Malaysia in the border
areas should show the way," he told the meeting, on Malaysia's
west coast resort island of Langkawi.

Mahathir said the border zone could incorporate Peninsular
Malaysia's three northern states of Kedah, Perlis and Kelantan
and Thailand's five southern states.

"In the designated border areas, the two countries'
comparative advantages should be identified and offered to
investors from both countries and to foreigners."

Malaysians, with a per capita gross domestic product of around
US$4,000, had more money to spend than their Thai neighbours but
at the cost of higher wages, said Mahathir.

He suggested cooperation could see Thailand help Malaysia cut
its costs while the latter contributed to Thai economic growth
and income. Malaysian exports to Thailand in 2002 were worth 15.1
billion ringgit ($3.98 billion), a surplus of 3.1 billion ringgit
over its imports.

Mahathir's Thai counterpart, Thaksin Shinawatra, suggested
alliances between businesses could include shared product testing
and standardisation, cost pooling, staff exchanges, co-funding
and joint supply chain and marketing deals.

"One plus one will equal more than two," he said in a speech
to the two-day meeting. Neither man gave practical details of how
the proposed zone might take shape.

Businessman-turned-politician Thaksin, who has enjoyed close
ties with ASEAN's elder statesman Mahathir since coming to power
in 1999, cited bilateral successes in boosting rubber prices as
an example of government-to-government contacts that helped both
sides.

However, the two neighbouring countries had been engaged in a
public row over Malaysia's decision to delay tariff cuts on car
imports as protection for local carmakers like Proton

The other members in the Association of South East Asian
Nations (ASEAN) are Brunei, Cambodia, Indonesia, Laos, Myanmar,
the Philippines, Singapore and Vietnam.