The draft, which comprises 62 articles, has already been finalised. However, the ministry cannot immediately submit the draft to the screening committee since it must first be scrutinised by another panel, whose representatives have no conflicts of interest or political connections.

"The government must ensure that the act creates fairness for all involved, not only a particular group of retail giants," the source said.

According to the Commerce Ministry, retail business accounts for 14 per cent of the country's gross domestic product.

Att Phisalvanich, director of International Trade Studies at the University of the Thai Chamber of Commerce, yesterday cautioned that the government should not rush into enacting a law that could send a wrong signal to foreign investors.

He said that in a globalised era, it was impossible to block foreign investment at the border and eventually it would be difficult to define which industries should be protected or open.

"The solution is to enhance Thai small retailers to concentrate more on business and service development to strengthen their competitiveness," he said, adding that it is not easy to compete with the multinational retail giants, which arrive with modern technology and long-time experience.

He suggested the government should play a key role in assisting small retailers to group together to create bargaining power to rival major operators.

As part of the strategy, local small retailers might form a company to handle all distribution tasks. The government should provide the company with initial financial support and management. After it shows it is able to operate strongly, the government should allow the private sector to manage it, Att said.

"Foreign investors have kept scrutinising Thailand, particularly since the coup," he said. "We have experienced that many economic policy announcements have halted foreign direct investment. Similarly, the retail business act's implementation would contribute to this environment."

Petchanet Pratruangkrai

The Nation