Setback in Thai deal hurts ties: Australia

Setback in Thai deal hurts ties: Australia

CANBERRA (Reuter): Australia said yesterday its defense links with Thailand would be damaged if the Thai army stopped an Australian firm bidding for a major rifle contract because of criticism from human rights groups.

Canberra announced last week it supported a bid by a government-owned arms maker to sell rifles to the Thai army, despite concerns from some Australian human rights groups that the guns could be re-sold to Khmer Rouge guerrillas in neighboring Cambodia.

Thailand's army chief Gen. Wimol Wongwanich said on Thursday his country would not buy defense equipment from Australia because of the complaints.

"This shows that Canberra cannot control its people from making speeches (against Thailand)," Wimol told reporters.

"It would be a major setback in our defense relationship if we were excluded on what we would regard as peripheral grounds," Defense Minister Robert Ray said in a television interview.

Australia would accept losing the contract if the rifles were seen as unsuitable or too expensive, Ray told Channel Nine's Sunday program.

"But if it's just on the basis that there has been criticism, not even by the government, but by certain groups in Australia of Thailand's attitude to Cambodia, then we would be a little upset," Ray said.

Disappointed

The Australian government had yet to confirm that it was going to be shut out of bidding for the contract, Ray said. "We would be very disappointed if that was the case."

The government-owned armsmaker Australian Defense Industries (ADI), which supplies the Australian and New Zealand armies with its Austrian-designed Steyr rifle, had planned to bid for the contract against firms from several other countries.

Ray said he believed the Steyr rifle was the best in the region and the Thai contract meant a lot to workers at ADI. Defense sources have estimated the contract to be worth A$130 million (US$96 million).

The Cambodian government and United Nations officials have in the past accused the Thai military of helping Khmer Rouge guerrillas waging a limited campaign against the Phnom Penh government. The Thai government has denied giving the guerrillas any support.

Ray said Australia accepted that Thailand was trying to stop any aid, either private or government, getting to the Khmer Rouge.

"Also you should remember there is a heap of weapons in Cambodia. They hardly need to go over the border to get them right now," he said.