Public discussion of FTAs needed
Public discussion of FTAs needed
The Nation
Asia News Network
Bangkok
The government appears to have finally put together a
structure and comprehensive strategy to pursue Free Trade
Agreement (FTA) negotiations with selected trading partners. But
the road ahead is still paved with obstacles. As FTA negotiations
get underway with the U.S. and Japan and intensify with
Australia, India and China, the Commerce Ministry has decided to
form two working teams.
One is to help formulate strategies for negotiations with each
country, the other to ensure that the Thai private sector
understands the consequences of such agreements, prepares for
trade liberalization and works closely with the government to
minimize the impact of new trade arrangements.
Two experienced commerce and trade experts have been assigned
to these tasks. One is Sompol Kittipaibul, former commerce
permanent secretary, the other Narongchai Akrasenee, a former
commerce minister and a trade economist. In addition, an FTA unit
has been created within the Commerce Ministry to give the
ministry a dedicated staff and resources to tackle the issue.
FTAs remain under the umbrella of the International Economics
Committee, which Finance Minister Somkid Jatusripitak heads.
This arrangement is a welcome one, though it took the
government three years to get its act together. No one can deny
that many of the pending FTAs have been pursued in haste --
especially those with India and China under the "early harvest"
program which saw tariffs in certain trading sectors dismantled
rapidly. The government might have won some praise for appearing
courageous because of its willingness to act quickly, but on the
other side of the coin many businesses found themselves
unprepared. Many businesses in the North, for example, found
themselves confronting an avalanche of competition in the form of
cheap fruit and vegetables from China.
Data shows that so far trade has increased with both India and
China, but whether this is due to the FTAs is questionable. In
any case, the gamble was made, and Thailand is now pursuing FTA
talks with Japan and the U.S.
Japan has already come up with a list of farm products for
which it wants exceptions to be made. The U.S., meanwhile, has
made both economic and political demands, with key members of the
Congress opposing any such deal unless the Thaksin government
shows that it's committed to functioning like a democracy, with
respect for free press and limits on support for the Burmese
junta.
Three big questions remain. First, will FTAs swamp the Thai
economy with foreign goods and make a mockery out of Prime
Minister Thaksin's nationalism?
Second, will FTAs lead to economic regionalism and new
agreements that will help deal with unfair non-trade barriers and
give small nations better bargaining power against bigger
nations?
Third and perhaps the most crucial, will Thai businesses be
able to take advantage of any changes brought about by FTAs? For
example, will domestic products be upgraded, or manufacturers
become more productive to compete with imports? Will exporters
likewise seize on opportunities to increase both export values
and volumes, or to sell more services?
These issues remain unresolved. The government has shown that
it's committed to aggressively pursuing FTAs, but many
fundamental economic questions remain unanswered. Clear answers
to these questions are necessary if public skepticism is to be
transformed into widespread support for the government on this
initiative. This is a giant undertaking and one that would
benefit from a little less political PR, both at home and abroad,
and more sensitivity, careful thinking and execution of
programs to help Thai industries adapt to the new environment
with minimal losses.