"Everybody understands that [with a new government, there may be policy changes]. If there's an area in which there are doubts, people will simply wait," said council president Matt Daley.

Daley was commenting on the political vacuum that has existed in Thailand over recent months, and the expectation that new elections will be called soon.

"We hope that a new Thai government will not change the rules that applied when companies entered the market," he said. "What we don't know is the attitude of the new government, and those question marks will exist until the new government comes to power. What are their plans? What is their attitude towards foreign banks? All those questions."

Daley, who presides over a council which aims to promote US business relations with Asean countries, said the structure of the American economy had changed to become internationally oriented. "When I went to college, only 5 per cent of US gross domestic product relied on foreign trade," he said. "Today, it's probably five times [more]."

Therefore, the role of the US Asean Business Council is to promote foreign business, he said, adding, "One of the things we do is analyse certain sectors of Asean to identify where trade is easy and where trade is hard, and make suggestions on how to make it easier."

For instance, the American way of doing business may run against domestic laws in some countries.

An example is the express delivery business, where organisations such as UPS and FedEx have the principle of maintaining direct control over a package from the time it is delivered until it reaches its destination. Therefore, the companies should be able to own trucks and control delivery companies to maintain the custody of packages all of the time, and not to transfer their parcels to other corporations.

"If they can't do that, then the scale of their investment will be smaller," he said.

Investment regulations are also a factor that prompts foreign investors where to place their money, especially when candidate locations offer similar workforces and infrastructure.

Recently, Intel, the giant US chipmaker, chose to set up a facility in Vietnam.

Daley said there was currently a lot of interest in Vietnam. Hanoi is moving aggressively towards a market economy and the country has just concluded bilateral talks with the US on accession to membership of the World Trade

Organisation. "I am not sure what it means to be communist, these days," he mused.

However, the country's policy shift is combined with young, talented workers in Vietnam. US interest in the country also coincides with the history of the war, thanks to a number of US politicians who were Vietnam veterans, including John McCain and John Kerry.

Although there is enormous interest in Vietnam at present, it remains to be seen if that interest will be sustained and continue into future years, Daley said. Vietnam also maintains some "investment-discouragement" polices, such as the government's insistence on inspecting every package entering the country. This has already been costly in terms of lost investment.

Daley said American businessmen were keen to see how free-trade talks with Thailand evolve. However, he warned that if the talks cannot be wrapped up by next spring, they might have to be delayed for a couple of years, until after the 2008 election.

He said the content of any free-trade agreement between the two countries should ensure the stable continuation of investment. Without an agreement, the expiration of the national treatment clause under the Treaty of Amity will probably become an issue, particularly if the talks are suspended. Originally, both governments planned an agreement that included a national treatment clause to replace that expiring under the treaty.

"It will be an issue," he said. "It was being addressed in the talks. We'd like to see the free-trade agreement talks proceed, but there's the question of how we resolve this issue. We don't have an answer yet."

Jeerawat Na Thalang

The Nation

WASHINGTON DC