Thailand, South Korea float free-trade pact

Thailand, South Korea float free-trade pact

Agence France-Presse Chiang Mai, Thailand

Thailand and key trading partner South Korea on Saturday considered a future free-trade agreement, although barriers on rice and auto parts remain sticking points, officials said.

"We are exploring the possibility of setting up a free-trade area between Thailand and South Korea," Thai Foreign Minister Surakiart Sathirathai said after meeting with his South Korean counterpart Yoon Young-Kwan.

"It will take some time," Surakiart said after an inaugural joint commission on bilateral cooperation between the two nations, adding that a timetable for the negotiations had yet to be worked out.

Progress can be made immediately on problem-free sectors including tourism and services, he said, but more discussion was needed on "sensitive" sectors.

Thailand is concerned about the trade barriers Seoul has imposed on Thai rice, chicken and tapioca exports, while Korea has problems with Bangkok's tariffs on auto parts, a Thai official said.

Thailand, which aims to become the auto manufacturing hub of Southeast Asia, has resisted moves to lower taxes on imported vehicles and parts beyond the minimum requirements set by the World Trade Organization.

The discussions with South Korea are the latest in a series of trade negotiations being pursued by Thai leaders.

On June 10 Prime Minister Thaksin Shinawatra agreed with US President George W. Bush to pursue a possible free-trade deal between the two countries.

Four days earlier, Japan's Prime Minister Junichiro Koizumi sidestepped a request from Thaksin to sign a free-trade agreement before the end of the year.

Surakiart and Yoon also discussed investment issues, including the possibility of teaming up on joint investment projects in the construction industry in post-war Iraq, a Thai foreign ministry spokesman said.

Their talks took place on the sidelines of the Asia Cooperation Dialogue (ACD), a forum focused on development and economic issues which Thaksin founded last year.

This weekend's ACD being held in the northern Thai city of Chiang Mai involves ministers from 18 Asian countries and is expected to center on the launch of the billion-dollar Asian Bond Fund.