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19 Dec 2007

Trading

New Rules for FTAs: A Challenge to the Government after Elections(Current Issue No. 2011)

คะแนนเฉลี่ย
Article 190 of the new Thai Constitution, B.E. 2550 (2007), is a new law that will challenge the government in future negotiations to form FTAs at all levels. Now, the impacts on all groups throughout our society must be taken into consideration in FTA negotiations, including new procedures for proposing FTAs, both pre- and post- negotiations, where approval from the Parliament will be required. These requirements did not exist before. Therefore, any negotiations on FTAs promoted by the government under the new constitution must more thoroughly take into account all foreseeable impacts on the country apart from primarily concentrating on trade talks with the FTA negotiators that aim only to expand export markets for our goods, services and investments.
KASIKORN RESEARCH CENTER (KResearch) holds the view that the new government after the elections should build more efficient mechanisms to draft FTAs within the framework of the new constitution. Significant points include procedures for the dissemination of information and the hearing of public opinions that must be held broadly, covering all parts of our society. If the public information and hearings are carried out thoroughly and efficiently, that would be beneficial to the state sector, as well, if they bring about sufficient information to properly negotiate on FTAs. It would also be good for the government if they proposed FTAs to the Parliament for approval, because the Parliament's scrutiny would place significance on the effects of FTAs on all segments of populace. Moreover, approved FTAs so implemented would enable the government to carry out their tasks more smoothly.
The efficient procedure of Thailand's FTA negotiations under the new constitution will enable the better progress of FTAs presently under talks, and vitally enhance Thailand's competitiveness in the global arena. Important pending FTAs include those between ASEAN and Japan, which is due for signing in February 2008, and the ASEAN and Europe, which is expected to commence negotiating process in April 2008. At present, Thai officials have proposed a negotiating framework to the Cabinet for ASEAN FTAs with other countries, which is now being considered by the National Legislative Assembly; further, Thailand has bilateral FTAs in process that include the Thailand-India FTA and Thailand-US FTA.
Apart from the importance of the effectiveness of FTA negotiations process under the new constitution would lead to FTAs that are more successful. KResearch views that the new government should expedite domestic measures efficiently to reduce any negative impacts from FTA establishment that might affect the populace. Mentioned measures include:
  1. Accelerate the process of FTA Fund to get concrete results in order to enhance the competitiveness of Thai entrepreneurs.
  2. Effectively implement safeguard measures that can reduce the negative impacts due to floods of imported products that increase rapidly after the implementation of FTAs.
  3. Standardize Thai products to upgrade their quality. This would reduce the harm of Non-Tariff Barriers (NTB) enforced by trade partners, particularly developed countries such as the USA and the EU. Besides this, the standardization of Thai products would help limit the proliferation of substandard imported products that affect our own domestic consumers, as well.

Although Thailand gains from enforcing FTAs with other countries such as the bilateral FTAs with Australia, New Zealand, China and India, it seems that the benefits will not last long. The fact is these trade partners also implement bilateral and regional FTA agreements in order to expand markets for their own products, services and investments worldwide, intent upon increasing their competitiveness and facilitating the entry of their products and services into other countries. Over the next three years, it is expected that exported Thai products that are benefiting at present will soon have to compete with third country products that also gain from FTAs made with Thailand's trade partners.

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