Published on January 13, 2006

The Kasikorn Research Centre yesterday advised the government not to rush into signing a bilateral trade pact with the United States.

In a press release, it especially warned against incorporating into the agreement sectors such as finance and telecommunications, which the centre said were not yet ready to be opened up.

A research department of BFIT Securities Plc, a subsidiary of Bangkok Bank Plc, echoed this opinion in a separate press release.

BFIT warned that Thai farmers might be adversely affected by a free-trade deal with the US, such as more than a million domestic corn growers who are likely to suffer with an influx of cheaper corn products.

Kasikorn Research Centre said the US and Thai governments should refrain from setting a deadline for the conclusion of the talks because of a number of unresolved sensitive issues remained.

“We should carefully review the text [of the agreements] and the talks should be based on mutual benefits,” the KRC statement said.

The centre said that if Thai officials agreed to abide by obligations set by an FTA, Thailand might have to change some of its domestic laws to accommodate the agreement. This includes changes to laws that currently limit the number of American citizens allowed to work in certain protected sectors. American investors might also be enabled by law to hold major stakes in certain businesses.

As a result, it was essential that the government review the likely effects of an FTA with the US and devise long-term measures to ease their adverse impacts on locals through financial support, educational initiatives and human resource development, it added.

But the FTA would not only be injurious to Thai businesses, the BFIT said. Unlike animal-feed, corn and soybean farmers, whose products are sold more cheaply by US manufacturers, exporters of shrimp, chicken, processed seafood, automobiles, textiles, jewellery and toys would benefit from the deal.

However, grape farmers might suffer because the agreement will remove the current 30-per-cent tariff on grapes from the US. More than half of all grapes consumed in Thailand are grown in California.

As far as pharmaceutical patent protection was concerned, around 600,000 HIV/Aids patients would face higher drug prices, BFIT said.

Once the agreement is put into effect, expenditures on medicine over the next decade could increase from Bt33.4 billion to Bt216 billion. The proportion of domestic and imported medicines would likewise change from a 54:46 to a 25:75 ratio over the same period, the research group warned.

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