Thailand warms up to TPP

27 Jan '16

3 min read

Civil society, academics and businesses generally want Thailand to join the 12-nation Trans-Pacific Partnership (TPP) that was finalized last October, according to the Commerce Ministry. But they have also urged caution, telling policymakers to study the likely impact of TPP carefully before making any final decision.

“The Commerce Ministry has had meetings with businesses, non-profit organisations, academics and the farm and livestock sector over the past few months, and they mostly said Thailand should join the new the new trade bloc," said Commerce Vice-Minister Winichai Chaemchaeng, the Bangkok Post has reported.

"But we still need to hear comments from other parties, particularly in provincial areas where we are scheduled to hold meetings from February."

Winichai said the business sector was particularly active in backing Thailand joining the TPP. The business sector says rice, sugar, frozen and processed shrimp, canned tuna, tapioca and starch, garments, gems and jewellery, pharmaceuticals, air transport, health tourism and direct sales would be most competitive if Thailand joined the pact.

But farm operators have urged authorities to study the pros and cons, saying Thailand was not yet able to compete with TPP members in terms of production costs of animal feeds.

They also urged the government to work out remedial measures for sectors that would be hit if Thailand joins the TPP.

The TPP is a trade agreement among 12 countries led by the US and includes Canada, Mexico, Peru, Chile, Australia, New Zealand, Japan, Singapore, Malaysia, Vietnam and Brunei.

The 12 TPP members account for 40 per cent of Thailand's trade and 45 per cent of foreign direct investment (FDI) annually.

Thailand has free-trade agreements with most of the 12 countries except for the US, Canada and Mexico.

Exports to Canada and Mexico account for less than 1 per cent of exports, while FDI from the two countries account for less than 2 per cent of FDI. On the other hand, the US accounts for 8 per cent of direct investment flows into Thailand annually.

The largest potential impact from the agreement on Thailand will be greater competition in the US market from TPP members.

Exporters are concerned that Thai exports to the US will be less competitive than similar products from TPP members because tariffs charged on Thai products will be higher than those on products from TPP countries.

Deputy Prime Minister Somkid Jatusripitak said last month that Thailand was highly likely to join the new trade bloc. (SH)

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