Thailand and New Zealand will hold talks within the next two years on opening up the service sector as part of the Thailand-New Zealand Closer Economic Partnership (Tncep).

When the pact was implemented in July 2005, it covered only tariff reductions on certain products. However, both sides agreed to hold talks on including trade in services after three years of the pact's implementation.

The pact is aimed at boosting two-way trade by reducing tariffs and trade barriers. A successful negotiation of trade in service would allow freer trade and present more investment opportunities by July 2009.

 During the next talks, New Zealand will concentrate on government procurement deals, service businesses and a freer flow of labour between the two countries.

The country's Trade Commissioner in Bangkok, Jo McEvoy, said the agreement would strengthen cooperation between the two countries not only in trade, service and investment, but also in the exchange of education and technology.

Although New Zealand's investment in Thailand seems meagre when compared to other nations, the country hopes to invest a lot more after the agreement is expanded, said McEvoy. Education, e-learning, information and communication technology, and environmental development are key sectors that investors from New Zealand are interested in.

"There is a huge noticeable change. The flow of some products has increased dramatically, though some may have decreased in export volume," she said, adding that the country was happy with the fact that exports of its main agricultural products had increased dramatically since the pact took effect.

According to the Statistics New Zealand, Thailand's export increased by 2.7 per cent to 1.03 billion New Zealand dollars (Bt23.8 billion) in the first four months of this year from the same period in 2005, while imports from New Zealand rose by 1.12 per cent to NZ$366.1 million.

Thailand's export to New Zealand rose by 2.1 per cent to NZ$740 million last year from 2004, while import rose by 1.14 per cent to NZ$354.26 million.

McEvoy said New Zealand's trade deficit with Thailand was not a big concern. However, there are a lot of challenges that lie ahead that need to be tackled to ensure full benefits from the agreement.

"We hope that New Zealand's products would be well appreciated by Thai consumers," she said.

The country is also planning to increase sales of its goods in Thailand via modern trade channels and supermarkets. Also, it will promote goods in restaurants, hotels, and other tourism spots. In addition, it plans to hold a national fair in the country to build product awareness.

Products that represent the largest slice of New Zealand's exports to Thailand include food and beverage (particularly dairy and baked goods), meat, fish and seafood, and natural products such as wood pulp, fabrics, animal hair and yarn.

Goods imported from Thailand include vehicles and parts, mineral fuel, machinery, plastics and electronic machinery.

New Zealand is in the process of negotiating free trade agreements with Malaysia, Singapore and Chile. However, New Zealand still shows less investment value in Thailand, when compared to Singapore and Malaysia. McEvoy pointed out that New Zealand has abundant natural resources, as does Thailand and that both countries have thriving tourism industries.

Achara Pongvutitham

Petchanet Pratruangkrai

The Nation