Published on July 18, 2005
It seems that Thailand’s Trade Representative Office is always empty as the representatives are busy making 20 to 30 trips abroad every year to bring home more trade and investment. Achara Pongvutitham and Petchanet Pratruangkrai speak to them on their priorities.
Thailand has three Thai Trade Representatives (TTRs), Prachuab Chaiyasan, Sompong Amornvivat and Pravich Rattanapien, who are working to push up exports by 20 per cent this year. This apart, the three also work as a back-up office for trade and investment negotiations and free-trade agreements. Their priority is to provide support for seven free-trade pacts that Thailand is negotiating with trading partners.
Appointed by the Thaksin Shinawatra Cabinet four years ago, they hold an office that is very important in a country where exports are considered one of the engines of economic growth. The TTRs, who have to deal with more than 100 countries around the world, work out strategies to penetrate markets. They also act as coordinators, working closely with the private sector and government agencies. “We’re not trade negotiators but trade-facilitators working on behalf of the Thai government. We have to create a smooth trade and investment atmosphere in both bilateral and multilateral talks,” says Prachuab. Prachuab focuses on Asia, Russia and CIS markets. He is also the head of trade negotiators for the Thailand-India pact and the Bimstec free-trade agreement (FTA). After implementing the “early harvest” of 82 products in September last year, Thailand and India will resume trade talks to increase the number of goods for market access and import-tariff reduction. The FTA talks with India were suspended last year owing to the general election there, with Thailand waiting for the new Indian government’s trade policy. Prachuab said he was considering more free-trade negotiations with India, which he pointed out still had a long list of sensitive products. “We have to ask India to limit the number to 10 per cent of total trade,” he said. Thailand is stepping forward its bilateral free-trade talks with India and Japan. Since its implementation on July 1, the Asean-China FTA has opened up a market of 1.8 billion people. The TTR Office is striking trade alliances with three core countries in Asia, China, India and Russia. Their combined population of three billion will open up a huge market. To access these population-based markets, Thailand needs to increase its exports of food, industrial goods and services. In a production-based country, Thai producers have to conduct more surveys to cater to market demand. The Thai health-services market is expanding thanks to the cheap but efficient service that attracts foreign patients. Patients from West Asian countries flock to Thailand to seek treatment, Prachuab said. The Thai Trade Representative Office also has to train negotiators not only for bilateral trade negotiations but also for multilateral talks with the World Trade Organisation and Asia-Pacific Economic Cooperation. Pravich Another TTR, Pravich, is drawing up a plan to position Thailand as the “medical hub of Asia”. The government wants Thailand to emerge as a regional centre for medical treatment and wellness clinics and as a manufacturing and export base for spa and herbal products. As a TTR with his focus on the North and South America, Australia and New Zealand markets, Pravich has closely monitored sector-by-sector impact of the free-trade agreements with Australia and New Zealand. “The FTAs with both Australia and New Zealand could be a template for Thailand to ink similar pacts with developed countries and a point of reference in the ongoing talks with the USA,” he said. Thailand is a small trading partner of the USA, accounting for only 1 per cent of the total US trade value. On the other hand, Thailand’s exports to the US market account for 25 per cent of the country’s total export value, which touched US$100 billion last year. The TTR has to closely monitor the Thai-US FTA negotiations to ensure that there are no loopholes that can be exploited for unfair trade practices. “South America is an interesting region, but very few Thai businessmen focus on that market. The government is exploring avenues for bilateral free-trade talks with Peru, which could be a springboard to the regional market” said Pravich. For instance, Thailand does not have any direct links with Cuba, though that country imports a lot of Thai rice via Panama. To promote trade and investment in the region, Prime Minister Thaksin might visit Peru and Argentina with leading Thai businessmen. Governments of both countries would then hold a business-matching meet to boost trade and investment. The potential business areas of the two countries are biotechnology and gasohol. In addition, Peru has well-known volleyball and football teams which could enter into an agreement with Thailand to train players and coaches. Pravich said there was also a plan to set up mini-trade offices in potential export markets. Honorary trade advisors and local businessmen will be roped in to draw up business plans in target countries. Eighteen mini-trade offices will be established in the major Chinese cities of Chengdu, Dalian, Kunming, Fuzhou, Guangzhou, Wuhan, Shanghai and Changsha under the aegis of the Thai Trade Office. With local traders on its side, Thailand will be in a better position to penetrate these potential markets. The first prototype mini-trade office has been set up in Hiroshima in Japan, managed by locals who also draw up the marketing plan for Thai products. “The honorary trade advisors and mini-trade offices will collect important information to help us form an export plan in advance,” said Pravich. More than 20 annual trips abroad have allowed Pravich to pinpoint a lot of export strategies for Thai goods. Sompong Thailand will help its enterprises expand their markets to new regions by appointing locals in potential markets as the Kingdom’ marketing personnel. TTR Sompong Amornvivat said many Thai businessmen were afraid of starting a trade relationship with regions such as Africa owing to the “many risks involved”. In such a situation, the local marketer can boost Thai exports through the proper channels. Sompong is in charge of Europe, West Asia and Africa, which includes 53 countries. The government is concentrating more on Africa as there are many countries on the continent, including Nigeria, Kenya, Uganda and Ethiopia, with which the Kingdom has had no trade ties. It has marked 2005 as the year to promote trade with Africa. Government trade missions will visit countries in the region to facilitate trade and investment. Thailand hopes to directly supply pharmaceutical goods, auto parts, air-conditioners and shipping equipment to Africa. Prime Minister Thaksin Shinawatra plans to visit Africa late this year. “So far, export to African countries is indirect, involving one million small traders who buy products from Thailand and take them to their home countries without notifying the customs,” he said, adding that the Kingdom wanted to bring such traders into the legal framework. Sompong said the government had asked Thai embassies in the target countries in Africa to screen the applications of traders who sought Thai visas. Qualified traders will enjoy more flexible conditions for visa approval. In addition, the Thai government is considering starting a trade zone in a joint venture with its trading partners to save costs and facilitate two-way trade. The trade zone will have warehouses which will be set up near harbours to facilitate cargo loading. “The African and West Asian regions could be a good market for Thai investors,” said Sompong “The problem is that Thai investors are reluctant to move into a new region. Thai traders prefer the traditional markets in the USA and EU as they are familiar with the regulations.” He noted that there was a huge demand for Thai textiles and garments in Africa. Each year many Africans visit Thailand to shop at the Bo-bae and Pratunam wholesale and retail cloth markets. “Yet we have lost many African shoppers to China owing to stringent laws,” said Sompong, adding that change was needed to make the country more competitive. He noted that if every buyer spent Bt1 million in the Kingdom, the receipts from shopping alone could skyrocket if one hundred shoppers visited Thailand. Sompong advised Thais to invest in West Asia, where residents had high purchasing power. He said dealers in medicine, garments, air-conditioners and motorcycle and auto parts could do well in the region.
Post your comment to this story here