Sign up | Log in



Home  >>  Daily News  >>  ASEAN ANALYSIS


Asean Affairs  8 December 2010

When is free trade not really free trade?

By  David Swartzentruber
AseanAffairs     8 December 2010

Related Stories

December 7,2010
Quest for Thaksin gets WikiLeaks connection

December 6,2010
The Thaksin saga continues

December 5,2010

December 3,2010
The call center sweepstakes

December 2,2010
A bamboo solution

December 1,2010
Is this a real move to reconcile?

November 30,2010
French influence in Laos, Cambodia remains

Noel Jones, Ph.D., an Irish academic, who studies free trade issues, gave a stimulating talk on free trade at the Foreign Correspondents’ Club of Thailand on Tuesday, December 7, on free trade issues.

This is currently an extremely important topic in Asean. Free trade agreements (FTA) with and within Asean are proliferating like rabbits in Australia. Among these are the China-Asean Free Trade Agreement and within Thailand, as an example, there is the Australian-New Zealand Free Trade Agreement with the European Union-Thailand Free Trade Agreement currently under review by the Thai Parliament. India would also like to conclude its free trade agreement with Asean and start it up as soon as possible. Asean appears to be holding out on the services part of the India-Asean agreement, thus delaying the implementation of the whole pact.

As these free trade arrangements are just a year old, the short and long-term impacts have yet to come into focus but in one small sector, the wine trade, there is an interesting scenario developing that Noel Jones was able to explain as “when free trade is not free”.

As background, it should be noted that Thailand has a notoriously high import duty on wine amounting to 360 percent. Most tourists to Thailand can attest to the high price of wine in Thailand.

With the advent of the Australia-New Zealand FTA in January 2010, import duties on Australian and New Zealand wine took their first cuts. Drops in the import duties will continue toward zero percent in four more years.

The results are immediately noticeable with Australian wines now on the shelf in the 200 to 300 baht range (US$6 to$10 range). However, Thailand has a domestic wine industry and at the start of the year, the Thai Winemakers Association complained that the new FTA had brought the prices of imported wines below the cost of their products.

About 10 years ago, the Thai wine industry started to grow (there are now eight wineries) and the Thai government ,always looking to find new sources of revenue, (as opposed to supporting a new agricultural industry with minimal taxes) placed heavy taxes and requirements on the fledgling industry.

Although the Thai Winemakers Association complained about the situation at the beginning of 2010, when the import reductions started, nothing much happened until November. In that month the head of Thailand’s Excise Department proposed that the excise tax on wines should be raised “to protect consumers from low-quality” products As though the duty of the excise department was to somehow “protect consumers” by raising prices.

Dr. Jones explained that this Thai example was not unique in the world of free trade agreements and that most of the free trade agreements put into effect did not bring free trade but something short of it. Governments continually found ways, such as excise taxes and tariffs, to skirt the provisions of FTAs , so that, in fact, most FTAs brought few consumer benefits at all. FTAs usually don’t deliver what they promise, according to Dr. Jones.

Paul A. Ebeling, Jnr

Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
  Online Ad Rates

Comment on this Article. Send them to

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below




1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

Our Products | Work with us | Terms of Use | Site Map | Privacy Policy | Refund Policy | Shipping/Delivery Policy | DISCLAIMER |

Version 5.0
Copyright © 2007-2015 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand