At a seminar entitled "A Study of Trade Facilitation and Remedy Measures between China and Asean (Regarding Thailand)," panellists said the free-trade pact would be unable to increase trade and investment in the most efficient way unless NYBs were removed.

These include differentiation of customs processes, inflexibility in the issuing of certification, high VAT surcharges, sanitary problems and inconvenient logistic and trade facilitation.

An Asean-China FTA was launched in July 2006, complementing tariff reductions under Asean's Common Effective Preferential Tariff Scheme. The agreement covers industrial and agricultural products and investment; services are still being negotiated.

Aat Pisanwanich, director of the university's Centre for International Trade Studies, said Thai and other governments had to establish a central committee to alleviate NTBs.

Under the Thailand-China FTA, import tariffs on agricultural goods were cut to zero earlier this year. However, China remains its VAT surcharge at 13 per cent.

"Although two-way trade between Thailand and China has increased gradually under the free-trade pact, trade and investment growth would be higher if such NTBs were eased," he said.

The Customs Department reported that Thailand had a trade deficit with China of US$1.73 billion (Bt59.8 billion) last year.

Exports from Thailand to China rose 27.7 per cent to $11.7 billion, while imports increased 20.4 per cent to $13.4 billion. Aat also suggested that the government revise its measures on imports and create a measure to monitor goods coming from China to ensure quality products for Thai consumers.

He warned the government to closely monitor electronic goods from China flooding the Thai market as there was no existing measure to control product quality.

Paiboon Ponsuwanna, chairman of the Food Processing Industry Club of the Federation of Thai Industries, said there were still many NTBs for goods exports to China because of different NTBs in each province of the People's Republic.

More Thai fresh fruit could be exported to China after the pact implementation, he said, though an inconvenient logistic system is still a barrier to market accessibility.

The Thai and Chinese governments are developing 1,200 kilometres of road from Chiang Rai through Laos to Kunming. The road is expected to be completed by the end of this year to facilitate Thailand-China and Asean-China export and investment growth.

Paiboon said the road should facilitate export growth from Thailand to China by 5-10 per cent. River transportation, which forms a major network in China, is more expensive and more time-consuming.

Petchanet Pratruangkrai

The Nation