The court's decision followed a ruling by the Central Administrative Court on Thursday that it did not have the authority to issue an emergency order blocking the FTA with Japan.

Yesterday's Supreme Administrative Court ruling dashed the hopes of NGOs trying to prevent Prime Minister Surayud Chulanont from signing the agreement in Japan next Tuesday.

A disappointed NGO source said they would consider what to do next.

Surayud leaves for Japan tomorrow.

The Board of Trade of Thailand said it supported the agreement. The board estimates that Thai exports to Japan will grow 20 per cent after the execution of the bilateral trade agreement between the two countries, said deputy secretary-general Pornsilp Patcharintanakul.

He said Thailand should benefit from the agreement overall, because Thai exporters were expected to be able to export more to Japan. Those sectors likely to gain from the agreement are textiles, fisheries and jewellery.

National Federation of Thai Textile Industries president Jane Namchaisiri said the agreement would lower tariffs for Thai textile exports to the Japanese market from 8 to 13 per cent now to zero.

Besides, if Thai producers manage to upgrade their technology through the cooperation that comes with the agreement, Thai textile exports to Japan should grow 30 per cent.

Board of Trade member Veerachai Wongboonsin said the Commerce Ministry planned to submit a draft for Cabinet consideration soon that would set up a fund to assist those adversely affected by FTAs.

The draft of the fund proposal was jointly authored by the public and private sectors.

In the initial stage, the government would provide the fund with financial support. The private sector would discuss how they could contribute to the fund.

A research report by Ayudhya Securities said agricultural producers should react positively to the FTA, because Japan's import tariffs on several agricultural products would be reduced, thus increasing Thai exporters' competitiveness.

The effect on the petrochemical sector should be neutral, because Thailand's export volume of plastic resin to Japan is small. As such, Japan's reduction of import tariffs from current levels of 2.5-21.3 per cent on petrochemical and plastic products will not affect the industry.

The impact on steel producers should be limited and not immediate, because tax reductions on certain types of steel will not start until 2018.

Auto-parts manufacturers will benefit in the short term by a decline in production costs, because they import steel raw materials mainly from Japan to meet Japanese manufacturers' specifications.

However, Ayudhya Securities noted that it maintained a medium- to long-term "neutral" profitability outlook for Thai auto-parts manufacturers, because they have weak negotiating clout. Local carmakers are expected to request that parts-makers reduce their prices in line with lower production costs.

Thai auto-parts producers are still unable to manufacture value-added products given a lack of research and development and skilled labour.