FTA

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FTA ???????????????? ???????????

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Why FTA?

• Lack of Progress WTO Doha Round (Multilateral)
• Increased Globalization and Competition
• Quicker Results
• Specific Benefits
• Defensive vs. Offensive
• Political Gain
• Miss the Bus Mentality

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Thailands Expectations from FTAs

• Increased Export
• Increased Investment
• Increased Employment
• Lower Cost for Consumers and Industries
• Efficiency Improvement
• Cooperation and Supports

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FTA Pitfalls

• Low Protection for Infancy Sectors
• Legal Shortcomings due to Lack of Qualified
  Personnel in Negotiations and Post-Signature
  Implementations
• In a Multilateral RTA, National Interests could
  be compromised

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Signed and Implemented FTAs

• Thai-Australia FTA (TAFTA)
• Thai-New Zealand FTA (TNZCEP)
• Japan-Thai EPA (JTEPA)
• ASEAN-China CEC
• ASEAN-Korea FTA (AKFTA)
• ASEAN-Japan CEP (AJCEP)
• ASEAM-Australia-New Zealand FTA (AANZFTA)
• ASEAN-India CEP

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Thai-Australia FTA - Status

• Signed July 5, 2004 Effect Jan.1, 2005
• Coverage Comprehensive
• ROO WO, ST, RVC
• Review Dec.1, 2005
• Latest Negotiation on Services and Investments
  to commence in August 2009
• Trade Volume 2008 US13.147b

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Thai-Australia FTA Cost v. Benefit

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• Export Growth gt 35
• Trade Surplus increases 3 folds
• Pick-up Trucks, Food, Electrical Appliances,
  Jewelry, Canned Tuna, Textile, Fruit Juice,
  Vegetables, etc.
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• Dairy Products
• Financial Services

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Thai-NZ CEP - Status

• Signed April 19, 2005 Effect July 1, 2005
• Coverage Comprehensive
• ROO WO, ST (Chemical Reaction), RVC
• Review May 25, 2006
• Latest Negotiation on Services and Investments
  pending cabinet resolution and parliament
  procedure
• Trade Volume 2008 US1.395b

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Thai-NZ CEP Cost v. Benefit

• Benefit
• Export Growth 20
• Pick-up Trucks, Frozen Shrimps, Canned Tuna,
  Plastic, Furniture, Jewelry, Vegetables, Fruits,
  Produce
• Cooperation Knowledge Transfer in Dairy Farming
  and Industry
• Cost
• Import Growth gt 50, Trade Deficit
• NTM SPS, TBT

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JTEPA - Status

• Signed April 3, 2007 Effect Nov. 1, 2007
• Coverage Comprehensive
• ROO WO, CTC, RVC 40, Process Rule
• Cooperation 7 Projects on Kitchen of the World,
  Value-Creation, PPP, Textile, Steel, HR in Auto
  Industry, and Energy Efficiency
• Latest Monitor Progress
• Trade Volume 2008 US53.628b

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JTEPA Cost v. Benefit

• Benefit
• Big Market, Export Growth 10
• Cooperation Projects
• Export of Services to Japan Elderly Care, Spa,
  Restaurants, etc.
• Cost
• Restrictive ROO Tuna
• NTM
• Genome?
• Industrial Waste Dump Site?

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ASEAN-China CEC - Status

• Signed Framework Nov.4, 2002
• Early Harvest for Ch.07-08 with Thailand
• Negotiation Going on for 2nd Group Services
• Coverage Comprehensive
• ROO WO, RVC 40 with Cumul., PSR
• Latest Review Trade Facilitation, SPS, TBT, 3rd
  Party Invoicing, 2nd Package Services
• Trade Volume US36.347b

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ASEAN-China CEC Cost v. Benefit

• Benefit
• Big Market with Strong Growth in Purchasing Power
• Increased Preference for Quality Imports and
  Product Variety
• High Tariff Advantage
• Fruits, Steel, Computer Parts, TVs
• Cost
• Strong Domestic Manufacturing Base
• Local Rules and Regulations
• Business Ethics
• Agricultural Products, Textile, Electrical
  Appliances, Glass Blocks, etc.

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AKFTA - Status

• Signed May, 2006 (Except Thailand)
• Signed Feb. 27, 2009 Thailand
• Effect Thailand October 2009 for Trade, June
  2009 for Services
• Coverage Comprehensive
• ROO WO, RVC 40, ST CTH, PSR, Cumul.
• Latest Implementation
• Trade Volume US10.529b

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AKFTA Cost v. Benefit

• Benefit
• Potential Market with High Purchasing Power
• Opportunity for Medium-Tech Goods
• Investment from Korea
• Cost
• Competition in Auto Industry, Electrical
  Appliances
• Cultural Content
• Logistic Services

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ASEAN-Japan CEP - Status

• Signed April 11, 2008 Effect June 1, 2009
• Coverage Comprehensive
• ROO Same as JTEPA with Cumul.
• Latest Negotiations on Services and Investment

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ASEAN-Japan CEP Cost v. Benefit

• Benefit
• More flexible than JTEPA
• Cumulation of Origin Benefit Thailand
• Economic Cooperations Business Environment, IPR,
  Energy, HR, SMEs, Tourism, Hospitality,
  Logistics
• Cost
• Same as JTEPA

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AANZFTA - Status

• Signed Feb. 27, 2009
• Coverage Comprehensive
• ROO Same as Thai-Aus and Thai-NZ
• Latest Implementation

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AANZFTA Cost v. Benefit

• Benefit
• Most Comprehensive
• Flexible Time Frame for Tariff Reduction
  According to Development Level
• Aus and NZ Can Supply Various Raw Material for
  ASEAN Manufacturing Sector e.g. Coal, Minerals,
  Wool, etc.
• Cost
• Trade Balance
• NTMs

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ASEAN-India CEP - Status

• Signed August 13, 2009
• Coverage Comprehensive with Economic
  Cooperation, Dispute Settlement, and Flexibility
  for CLMV
• ROO RVC 40, PSRs
• Latest Signed, Implementation

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ASEAN-India CEP Cost v. Benefit

• Benefit
• Big Market (Pop. 1.1b)
• Export Growth gt 30
• Normally High Import Duty
• Early Harvest Items Fruits, Canned Seafood,
  Jewelry, Engine Spare Parts, Electrical
  Appliances
• Cumulation of Origin Allowed
• Cost
• NTB, AD, ROO

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Issues for Signed FTAs

• Monitor Trade
• Remedy Measures
• Defense Safeguards, Anti Dumping Measures
• Offense Push for Market Access
• Periodic Review
• Make Full Use of Cooperation Projects

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FTAs Under Negotiations

• Thai-India FTA
• Thai-Peru CEP
• Thai-U.S. FTA
• Thai-Bahrain CEP
• Thai-EFTA FTA
• BIMSTEC
• ASEAN-EU FTA

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Thai-India FTA - Status

• Signed No
• Effect Early Harvest 82 items Sep.1, 2006
• Coverage Comprehensive
• ROO CTSH 35 RVC with PSR
• Latest Dec. 2008, Close to Agreement on Goods,
  Work Remains for Services and Investment
• Trade Volume 2008 US5.975b

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Thai-India Cost v. Benefit

• Benefit
• Big Market (Pop. 1.1b)
• Export Growth gt 30
• Normally High Import Duty
• Early Harvest Items Fruits, Canned Seafood,
  Jewelry, Engine Spare Parts, Electrical
  Appliances
• Cost
• NTB AD, ROO

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Thai-Peru CEP - Status

• Signed 1st Protocol Nov. 19, 2005
• Coverage Comprehensive, Target 2015
• ROO Under Negotiation
• Latest 2nd Protocol July 2009, Cabinet Approval
  and Parliament Procedure
• Trade Volume US327.92m

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Thai-Peru CEP - Cost v. Benefit

• Benefit
• Gateway to Mercosur
• Export Growth 100
• Potential ExportsPick-up Trucks, Plastic,
  Electrical Appliances and Computers, Synthetic
  Fibers, etc.
• Cost
• Distance

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Thai-USA FTA - Status

• Started in 2004, currently suspended
• TPA expired June 30, 2007
• Coverage Comprehensive
• Latest Transformed to Economic Cooperation
• Trade Volume US31.698

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Thai-USA FTA Cost v. Benefit

• Benefit
• Big and Traditional Market with High Purchasing
  Power
• Large Import Product Varieties
• High Tariff Advantage
• Cost
• IPR Entertainment, Computer S/W,
  Pharmaceuticals, etc.
• Highly Subsidized Farm Sector
• Service Sector

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Thai-Bahrain CEP - Status

• Signed Dec. 29, 2002 Effect EH 626 items
• Coverage Comprehensive
• Latest Suspended. Bilateral Meeting Planned.
  Transform to ASEAN-GCC FTA Supported.
• Trade Volume US321.56m

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Thai-Bahrain CEP Cost v. Benefit

• Benefit
• Gateway to Gulf States
• High Purchasing Power due to Wealth Migration
  from Oil Price
• Oil Supply Security
• Cost
• Culture Differences
• Specific Product Preferences

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Thai-EFTA FTA - Status

• Covers Non-EU Countries Iceland, Norway,
  Liechtenstein, Switzerland
• Suspended since October 2007
• Coverage Comprehensive
• ROO Differences remain Ex-Work Price or FOB in
  RVC, No Duty-Drawback, PSR
• Latest Exchange Requests and Offers

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Thai-EFTA FTA Cost v. Benefit

• Benefit
• High Purchasing Power
• Bearing on EU
• Cost
• IPRs, Restricted ROO, TBT, NTM

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BIMSTEC - Status

• Originally Bangladesh, India, Myanmar, Sri Lanka,
  Thailand. Bhutan and Nepal joined later.
• Coverage Comprehensive
• ROO CTSH35 RVC (30 for LDCs), PSRs
• Latest List and Modality of Tariff Reduction
• Target Trade in Goods Signing within 2009

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BIMSTEC Cost v. Benefit

• Benefit
• Potential Markets West of Thailand
• Alternative to Thai-India or ASEAN-India
• Potential Investment Targets
• Wide Range of Products, incluing agricultural
• Cost
• Competitors in Shrimp Farming
• Labor-Intensive Products

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ASEAN-EU FTA - Status

• Most Sophisticated and Challenging
• Coverage Comprehensive with Economic Cooperation
• Latest 7 Rounds of Negotiation, Latest March
  2009, Not Much Progress, Suspended. Bi-Lateral
  with Front-Line Countries.

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ASEAN-EU FTA Cost v. Benefit

• Benefit
• Major Export Market with High Purchasing Power
• Large Import Product Varieties - Food
• Cost
• Subsidized Farm Sector
• NTB SPS, REACH, Eco-Label, Fairtrade, Animal
  Welfare, WEEE, etc.
• IPRs, Pharmaceuticals TRIP Plus

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Issues for Unsigned FTAs

• Gather In-depth Sectorial Information
• Identify Targets
• Form Strategies
• Create Public and Private Sector Network
• Create Awareness and Participation
• Balance Cost and Benefit