Thai Cabinet approves talks with EU on free trade pact

05-Dec-2012

The Thai Cabinet yesterday gave the green light to negotiating a free-trade agreement (FTA) with the European Union (EU) and appointed Olarn Chaiprawat as head of the negotiation team.

Thossaporn Serirak, spokesman for the Prime Minister's Office, said the Cabinet agreed on a draft of the FTA proposed by the Commerce Ministry.
The ministry has also been assigned to discuss the issue with the private sector and hold a public hearing.

Olarn was named head of the team that will negotiate the details of the pact with the EU. The results of those talks will then be brought before Parliament.

The negotiation will cover 17 issues, including trade, customs procedures and trade facilitation, rules of origin, trade relief measures, and technical barriers to trade, services and investment. Intellectual property, state procurement, transparency, state disputes, competition, sustainable trade and development, and others are also included.

Thossaporn said the Commerce Ministry reported to the Cabinet that the EU was geared towards FTA negotiations with other Asean countries such as Singapore, Malaysia and Vietnam.

The ministry said representatives of the private sector had commented that Thailand would suffer disadvantages if it did not negotiate with the EU. However, negotiators should be careful to ensure the country's optimal benefits, along with relief measures for those who are adversely affected by the trade deal.

Among possible downsides for the Kingdom are the EU's emphasis on complying with intellectual property as agreed with the World Trade Organisation, which may result in agricultural monopolies; restricted access to medicines because of patent enforcement; liberalisation of alcoholic drinks and cigarettes that may cause more consumption of harmful products; and impacts on Thailand's resources and environment.

However, the Commerce Ministry believes an FTA is urgently needed as Thailand will lose EU customs privileges in 2015, when the Generalised System of Preferences ends. The industries that will be affected by the GSP cut include automotive, rubber gloves, frozen seafood and canned pineapple.

The FTA will also provide an opportunity for Thailand to become a centre for EU trade and investment in Asean, particularly in the automotive, electronics and services industries.