The Public Must Be Heard On Free Trade Proposals: Thai Editorial

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EDITORIAL

The public must be heard on free trade proposals

The Nation

BANGKOK: -- With Thailand set to join numerous trading blocs, it is essential that the govt opens a public discussion, as this issue will affect everyone

The Cabinet recently endorsed a draft of the Thailand-European Union free-trade agreement (FTA), reasoning that, without such an agreement, Thai traders and exporters could lose their competitive edge to other countries in the region. Neighbouring countries are also involved in free-trade talks with Thailand.

Asean and the EU previously discussed the idea of creating a bilateral free-trade agreement, but those talks collapsed because of problems in dealing with Myanmar when it was still regarded as a pariah state, despite being a member of Asean.

Although the Myanmar question is no longer on the table, the EU has pursued bilateral trade deals with individual Asean countries. The Thai government will have to consider whether to actually proceed with its bilateral FTA to prepare for the end of the European Union's privileges under the Generalised System of Preferences. But the FTA covers not only trade - there are other issues, such as investment, competition policy and intellectual-property rights.

While the scope of the proposed FTA is diverse, to make the talks meaningful, the Thai government needs to arrange a proper public debate. Some consumer groups have voiced concern over the FTA's possible effects on ordinary Thais. How long, for example, will Thailand's new pharmaceutical products be protected? The government has so far failed to address this. It can argue that details of the talks have yet to emerge, but it is better nevertheless to communicate with all stakeholders from an early stage about potential gains and drawbacks.

Thai trade negotiators must inform the public of the current situation, listen to its opinion and address its concerns. If they do not, they will lose public support. Of course, it may indeed be too early to speculate on the fine details, since talks have not yet started, but the government must bring the public into the discussion immediately.

An exchange of views is essential to ensure the public is well informed and prepared for the consequences. Otherwise, the discussion will be one-sided, or could be easily manipulated by those who most fear losing their advantage due to more-open competition. Such individuals and organisations tend to cite nationalist sentiments when protecting their interests.

Thailand will need negotiators of the calibre and integrity of the late Bajr Issarasena, former permanent secretary to the Commerce Ministry, and Krirkkrai Jirapaet, former trade representative. The government has recently assigned Trade Representative Nalinee Taveesin to oversee the EU talks. However, Nalinee's controversial past business links in Zimbabwe raise the question of her suitability to represent the country's interests.

But it is not only in the Thai-EU FTA talks that the government must be more active in communicating with the public. Such communication must cover all prospective trade agreements. Thailand is poised to enter three other major free-trade pacts, including the Trans-Pacific Partnership and the Asia Regional Comprehensive Economic Partnership. This is not to mention our obligations under the Asean Economic Community due to debut in 2015.

Thailand cannot ignore global evolution, in which countries are forming trade blocs while multilateral talks under the Doha Round of the World Trade Organisation remain stalled.

Unfortunately, as things stand now, the government has yet to prepare the best resources and strategies to participate in these talks. Trade negotiations are complicated in nature and can be easily manipulated politically if the government does not take a firm stance and get feedback from the public. To avoid such discussion will not allow for the best alternative options to be heard and perhaps adopted. Even if the government decides to ignore the public, its decisions should be based on thorough strategic study and discussion with experts. We cannot allow ignorance or arrogance to dictate our economic future.

-- The Nation 2012-12-06

[asiawatcher]

"We cannot allow ignorance or arrogance to dictate our economic future."

Too late...

[MaxLee]

Free trade is "a very complicated matter" because "it will endanger the Phu Yai politicians to lose face in the face of innovation aka exposing the old Ellite's mistakes and the corruption that has made them so rich at the cost of taxpayers' AND International business men's money, reaped on their disadvantage of not being able to speak, read and write Thai language and disadvantage of understanding the Thai (OUT)Law systems.

Edited December 6, 2012 by MaxLee

[fareastguy]

This must be a huge dilemma for the Yingluk regime, they feel they must join the merging Asean countries or suffer a loss of business, & likewise with the EU & USA in free trade agreements, but at what cost to Thai manufacturers who up to now have enjoyed a relatively uneven playing field in their favour.

While consumers ultimately gain from more choice Thai producers will be cringing thinking that they will not be able to compete with cheaper or higher quality imports.

The only reason the government hasn't come up with a plan so far is that it is still trying to figure out a way to join the FTA's but without having to import anything in return for it's new found export market.

When you look around at the car market alone the choice is limited to around half a dozen car makers as import prices drive up costs on other models, can you imagine all the European models being allowed to enter the country at competitive prices..

a lot of sleepless nights ahead I think !!

[Thai at Heart]

This must be a huge dilemma for the Yingluk regime, they feel they must join the merging Asean countries or suffer a loss of business, & likewise with the EU & USA in free trade agreements, but at what cost to Thai manufacturers who up to now have enjoyed a relatively uneven playing field in their favour.

While consumers ultimately gain from more choice Thai producers will be cringing thinking that they will not be able to compete with cheaper or higher quality imports.

The only reason the government hasn't come up with a plan so far is that it is still trying to figure out a way to join the FTA's but without having to import anything in return for it's new found export market.

When you look around at the car market alone the choice is limited to around half a dozen car makers as import prices drive up costs on other models, can you imagine all the European models being allowed to enter the country at competitive prices..

a lot of sleepless nights ahead I think !!

Competition is a bitch huh? To many companies have hidden behind competition restrictions for too long. Just note the cleverer ones starting to invest outside Thailand.

Things will change, and by far the largest interest group are the Thai consumers. They beat any individual market or company interests.

[FarangTalk]

They have blundered into these free trade agreements with absolutely no intention of honouring them. The carrot would have been pure greed, without a thought for the stick as per usual.

can you imagine all the European models being allowed to enter the country at competitive prices..

Never going to happen. It would hurt the domestic market unless there was a drastic restructuring of pricing for locally assembled vehicles.

A 3-series BMW built in Germany and imported would be roughly 1/3 cheaper than a locally assembled one for example.

Such a change is badly needed as unlikely as it is to happen though. The second hand car market is saturated with over-priced, decrepit cars that are overvalued often by over 1000% for luxury models. They don't seem to have a concept of value or depreciation on used vehicles.

The automotive issue is an interesting one because there has to be a change at some point down the line. The present status quo of 1 million+ new vehicles per year on crumbling and unsustainable infrastructure countrywide further complicates matters.

[markt7081]

They have blundered into these free trade agreements with absolutely no intention of honouring them. The carrot would have been pure greed, without a thought for the stick as per usual.

can you imagine all the European models being allowed to enter the country at competitive prices..

Never going to happen. It would hurt the domestic market unless there was a drastic restructuring of pricing for locally assembled vehicles.

A 3-series BMW built in Germany and imported would be roughly 1/3 cheaper than a locally assembled one for example.

Such a change is badly needed as unlikely as it is to happen though. The second hand car market is saturated with over-priced, decrepit cars that are overvalued often by over 1000% for luxury models. They don't seem to have a concept of value or depreciation on used vehicles.

The automotive issue is an interesting one because there has to be a change at some point down the line. The present status quo of 1 million+ new vehicles per year on crumbling and unsustainable infrastructure countrywide further complicates matters.

Im no expert on Free Trade Agreements, but Australia has one with Thailand.

Thats cars from Thailand to Oz with impunity,

A bottle of Australian wine, here 4 times that in Australia (same stuff)

Bring your own Motorcycle from Australia, yep thats 200% tax on the NEW price !

From my (very limited) experience, the Thais will manage to load the dice and be quids in.

No doubt, someone will correct me.

[Jitar]

Like Markt I am no expert but the Thai - Australian FTA seems to have achieved SFA. Ford are trying to sell the Territory diesel model in Thailand for 3M THB, or about double the price. I wonder what the price would have been with out the FTA.

Interesting the Thai-US FTA discussed since 2003 is not mentioned in the OP?

Edited December 6, 2012 by Jitar

[khunken]

They have blundered into these free trade agreements with absolutely no intention of honouring them. The carrot would have been pure greed, without a thought for the stick as per usual.

can you imagine all the European models being allowed to enter the country at competitive prices..

Never going to happen. It would hurt the domestic market unless there was a drastic restructuring of pricing for locally assembled vehicles.

A 3-series BMW built in Germany and imported would be roughly 1/3 cheaper than a locally assembled one for example.

Such a change is badly needed as unlikely as it is to happen though. The second hand car market is saturated with over-priced, decrepit cars that are overvalued often by over 1000% for luxury models. They don't seem to have a concept of value or depreciation on used vehicles.

The automotive issue is an interesting one because there has to be a change at some point down the line. The present status quo of 1 million+ new vehicles per year on crumbling and unsustainable infrastructure countrywide further complicates matters.

Im no expert on Free Trade Agreements, but Australia has one with Thailand.

Thats cars from Thailand to Oz with impunity,

A bottle of Australian wine, here 4 times that in Australia (same stuff)

Bring your own Motorcycle from Australia, yep thats 200% tax on the NEW price !

From my (very limited) experience, the Thais will manage to load the dice and be quids in.

No doubt, someone will correct me.

You are right with your figures but a free-trade agreement is by no means 100% free. Take wine for example - all wine from Oz, Peru, France & the locally produced versions are slapped with the same tax, so it's not discrimination (except against wine drinkers). Similarly all motorcycles, cars & other vehicles will pay an import tax if not assembled here.

Also, Thailand has issues with Oz about the protection of foodstuffs by means of opaque rules on safety. Not knocking Oz - all countries play the same sort of game.

[ratcatcher]

I am still waiting for someone to correct you. You must have a good hammer?

[BEVUP]

They have blundered into these free trade agreements with absolutely no intention of honouring them. The carrot would have been pure greed, without a thought for the stick as per usual.

can you imagine all the European models being allowed to enter the country at competitive prices..

Never going to happen. It would hurt the domestic market unless there was a drastic restructuring of pricing for locally assembled vehicles.

A 3-series BMW built in Germany and imported would be roughly 1/3 cheaper than a locally assembled one for example.

Such a change is badly needed as unlikely as it is to happen though. The second hand car market is saturated with over-priced, decrepit cars that are overvalued often by over 1000% for luxury models. They don't seem to have a concept of value or depreciation on used vehicles.

The automotive issue is an interesting one because there has to be a change at some point down the line. The present status quo of 1 million+ new vehicles per year on crumbling and unsustainable infrastructure countrywide further complicates matters.

Im no expert on Free Trade Agreements, but Australia has one with Thailand.

Thats cars from Thailand to Oz with impunity,

A bottle of Australian wine, here 4 times that in Australia (same stuff)

Bring your own Motorcycle from Australia, yep thats 200% tax on the NEW price !

From my (very limited) experience, the Thais will manage to load the dice and be quids in.

No doubt, someone will correct me.

would have to agree

all this free trade stuff is FOS

Auss gov still has their head up their a*se

As mentioned companies must be reeling as they cant sell their products overseas

But at least thailand is protecting its borders like auss did before with tarrifs but have now dropped them all

The only free trade would seem to be on rice, where the auss gov lets in for free but in return auss companies are taxed to the eye balls

[caughtintheact]

khunken but a free-trade agreement is by no means 100% free.

Then it is not free trade any more than a "free market" encumbered by government meddling is a free market. There are no free markets, only lesser encumbered markets.

At least one reason given for the latest delay to the AEC opening is to write more regulations for the so-called free flow of goods and services. How much does free flow have to be regulated before it is no longer flowing freely? In fact it only takes one regulation.

A public debate can get messy, but it might help by showing the potential impacts of the regulations, preparing the public, and helping to clarify and expose what the rules do not say, because all government policies have repercussions, intended, unintended as well as unforeseen. There is unlikely to ever be totally free trade, but the more the restrictions can be kept to a minimum, the more likely that people will be better off in the long run.