By Phusadee Arunmas, Bangkok Post, Thailand
Jun. 4–Thailand’s role as a vital production base in Asean could be threatened because of political unrest.
“Political turmoil at home may not affect Thailand’s commitments to regional free trade pacts under Asean, but we are gravely concerned that political factors may erode the confidence of foreign investors now weighing their investment decisions in Thailand,” said Nuntawan Sakuntanaga, director-general of the Trade Negotiations Department at a seminar.
The Asean Economic Community (AEC) aims to transform Asean into a single market and production base that is highly competitive and fully integrated into the global community by 2015.
The economic integration goals include the elimination of tariffs, free movement of professionals, freer movement of capital, and streamlined customs clearance procedures.
Within this year, she said, Asean mutually agreed to liberalise four priority sectors _ tourism, telecommunications, air transport and services related to computers _ allowing foreigners to take a stake of 70%, up from 49%.
Tariff cuts under the Asean Free Trade Area agreement (Afta) since the beginning of this year have significantly raised Thai exports throughout the grouping.
The value of bilateral trade between Thailand and the other nine Asean members reached US$17.64 billion in the first quarter. Thai exports to the region rose 67% year-on-year to $10.52 billion, with imports up 33.9% to $7.11 billion.
Asean is now Thailand’s largest export market, representing about 21.3% of the country’s export value, with the European Union accounting for 11.9%, the United States 10.9%, and China 10.6%.
Trade between Thailand and Asean was worth $57.48 billion last year, $32.49 billion of which represented Thai exports, with imports worth $24.69 billion.
Pornsil Patcharintanakul, the deputy secretary-general of the Thai Chamber of Commerce, said frozen food and non-metallic materials are expected to have a rough time due to tariff cuts under Afta, as scarce raw materials and higher production costs will hamper their export outlook within the region.
He warned that farm products such as rice, tapioca, maize, soybeans, oil palm, and coffee would also be harder hit from freer trade if Thailand fails to address existing obstacles such as quality seeds, production costs, research and development, logistics, and genetically modified organisms.