FTA WITH JAPAN: Fix trade pact or forget it, say industry chiefs
リンク: Bangkok's Independent Newspaper.
FTA WITH JAPAN: Fix trade pact or forget it, say industry chiefs
Published on May 06, 2005Private sector groups complain deal is unbalanced and threatens to wreak havoc on crucial domestic industries
Two of the country’s largest business associations called on the Thaksin government yesterday to overhaul its proposed free-trade pact with Japan – or scrap the proposed deal altogether.
The unprecedented press conference yesterday held jointly by the Federation of Thai Industries (FTI) and the Board of Trade marked the first united opposition by Thai businesses against the government’s FTA plans.
Both business associations said an FTA with Japan would result in massive damage to the automotive, automotive parts, steel and agricultural industries in Thailand, while the Kingdom stands to gain little by having access to Japan’s agricultural market.
The seventh and latest round of FTA negotiations, moved the countries closer to a deal as both sides tried to work out a compromise over issues surrounding steel used in the Japan-dominated automobile industry in the Kingdom.
“We should forget all the negotiations in the seventh round, which inch toward a final package. Our people in the agricultural sector think that we should renegotiate with Japan, which has not made enough concessions on trade in agricultural products,” said Phornpinit Phornprapha, vice chairman of the Board of Trade, which has been assigned to speak on behalf of both trade groups.
He said the government should protect the local car industry over the next 10 to 15 years before negotiating a trade pact with Japan.
Phornpinit, who comes from the auto parts industry, said the seventh round of FTA negotiations held in the resort area of Khao Yai in April was a big “mistake”, because the Thai side gave in too readily to Japan’s demands.
Phornpinit said if the final agreement lifts tariffs for the Japanese auto industry, it would completely destroy the 500 local automotive and automotive-parts companies.
Moreover, the Thai government stands to lose huge tax revenues if auto tariffs are removed. “Thailand’s aspiration of becoming the Detroit of Asia would never be realised because Thai enterprises would not be able to compete against cheaper Japanese cars,” he said.
“With 30 to 80 per cent tariff rates for automotive products, the Kingdom is still recording a trade deficit against Japan of Bt77 billion a year [in autos and auto parts]. If we drop the import tariffs further, our [auto and auto parts] deficit would soar to between Bt150 billion and Bt200 billion in the next three to five years,” added Phornpinit.
The board and the FTI would like the government to keep the automotive industry on the list of protected industries until 2010.
In addition, Sanchai Ngampronsuksawat, director of the FTA committee, has warned of the impacts from eliminating tariffs on 3,000cc Japanese cars, which Thailand does not produce at the moment.
“A zero tariff will lead consumers to turn to high-powered 3,000cc engine cars from Japan, the costs of which are about the same as Thailand’s 1800-2,500cc engine cars,” he said.
Meanwhile, Japan’s economic, trade and industry minister, Shoichi Nakagawa, will meet over two days with Finance Minister Somkid Jatusripitak to discuss FTA issues.
Nakagawa is expected to reiterate Japan’s position that Thailand remove automotive tariffs as part of the FTA deal.
Thailand and Japan would like to conclude the FTA by July, but the two private sector associations said a final agreement should be delayed if the deal fails to benefit all parties.
Pornsilp Patchrintanakul, deputy secretary-general of the Board of Trade, said non-tariff barriers are also a contentious issue in the talks.
“There are several agricultural products that would not benefit from the FTA with Japan, such as sugar. Japan would like to defer those talks into the future but not more than five years. The Thai private sector would like Japan to bring down tariffs for sugar to zero per cent immediately,” he said.
Petchanet Pratruangkrai
The Nation
