Thailand may 'step back' from ASEAN free trade pacts

Thailand may 'step back' from ASEAN free trade pacts

Dow Jones, Bangkok

Thailand's Commerce Minister Adisai Bodharik said Friday that the government may not comply with free trade agreements under the Association of Southeast Asian Nations if other members continue to lack commitment to such obligations.

Adisai said foreign investors might view Asean as weak and not concerned enough with the overall interests of the group following Malaysia's postponement of reduced import tariffs in the auto industry and a delay in cutting sugar import tariffs by the Philippines and Indonesia.

As Asia's largest sugar exporter, Thailand is concerned it will lose sugar export opportunities to the Philippine and Indonesia following their delay in reducing sugar import tariffs.

Malaysia postponed an auto import tariff reduction to Jan. 1, 2005, from Jan. 1, 2000. The Philippines and Indonesia, meanwhile, have delayed cutting sugar import duties originally scheduled for 2002.

In response to requests from the Philippines and Indonesia, the Asean Free Trade Agreement Council last September allowed the Philippines to freeze its sugar import tariff rate at 50 percent for several more years ahead of a phased reduction beginning in 2004 to a maximum of 5 percent in 2010. Indonesia, meanwhile, was allowed to start lowering its tariff in 2005, and the final tariff rate will be allowed to exceed 5 percent.

"If (other Asean nations still don't comply with AFTA agreement), Thailand will also step back...and turn to bilateral negotiations with each Asean country," Adisai said.

However, Adisai said the Thai government still calls for tightening cooperation among Asean members and will ask the group at an informal meeting of Asean economic ministers on July 5-7 to find ways to strengthen Asean.

Asean comprises Thailand, Malaysia, Indonesia, the Philippines, Singapore, Cambodia, Laos, Vietnam, Myanmar and Brunei.