Talks with EU to begin next month

Kingdom bids to catch up after US announcement

After many years of consideration, Thailand will next month officially announce the start of free-trade negotiations with the European Union.

"Thailand decided to start the talks with the EU to ensure its competitiveness after the United States recently said it would kick off talks with the EU. Other Asean countries such as Malaysia, Singapore and Vietnam have also had bilateral talks with the union," Piramol Charoenpao, director-general of the Trade Negotiations Department, said yesterday.

The announcement will be made by Prime Minister Yingluck Shinawatra during her official visit to the EU's headquarters in Brussels from March 6-7, then the talks with the EU should kick off this quarter.

Parliament recently passed the draft of the negotiations for Thailand to form a comprehensive free-trade agreement with the EU. The department is expected to spend about two years completing the negotiations and the deal is expected to be implemented within two years.

If Thailand delays the talks with the EU, it could be left behind, since other countries will get more privileges to access this market. Thailand also wants to ensure that it will continue to get tariff privileges after the EU restructures it Generalised System of Preferences (GSP) next year, when many products from Thailand could lose tariff benefits, Piramol said.

Thailand should also be able to draw more investment from European investors under the FTA, he added.

Pornsilp Patcharintanakul, vice chairman of the Thai Chamber of Commerce, said Thailand needed to accelerate the talks with the EU as well as expand trade cooperation with the US under the Trans-Pacific Partnership, as both markets are still major destinations for Thai exports.

The chamber fully supports the government in negotiating with the EU as it sees the pluses outweighing some threats, he said.

The EU will cut many tariff privileges after its GSP reform. Thailand needs to ensure that it would not lose advantages while other trade rivals, in particularly Asean, enjoy free-trade pacts with the EU, Pornsilp said.

However, some issues remain such as drug patents and alcohol and tobacco imports. Some non-governmental organisations are worried about a flood of booze from abroad. The government needs to clarify the issues and solve the problem with expensive drugs to ensure Thai patients can afford patented drugs from the EU, he said.

To solve the problem of an influx of alcohol and tobacco, Thailand can protect its market by gradually reducing tariffs and extending the period of tariff cuts, he added.

According to the Commerce Ministry, the EU is Thailand's fifth-largest export market, taking 8.5 per cent of the Kingdom's overseas shipments by value. Last year, exports declined by 9.2 per cent to US$19.5 billion (Bt580 billion).