SUPACHAI Panitchpakdi, former director-general of the World Trade Organisation (WTO), is worried about the way that technology giants like Alibaba, Facebook, Google and Apple do businesses, warning that their opaque practices could lead to monopolies in local and global economies.
While the government has been trying to woo e-commerce and other technology companies to invest in the country under the Thailand 4.0 policy, Supachai was cautious on the benefits that might come from such investments.
“The government should not make too many concessions by allowing them to do everything,” he told reporters yesterday on the sidelines of “The Trade and Development Regional Forum 2017”. The two-day event is hosted by the International Institute for Trade and Development.
His remarks come after the China-based Alibaba Group announced plans to invest in Thailand’s Eastern Economic Corridor.
Supachai said Alibaba not only owns its popular e-commerce platforms but has its own logistics and payment platforms as well as Big Data-derived knowledge of consumers and suppliers.
The government needs to monitor closely how companies with such an extensive reach operate, said Supachai, who was secretary-general of United Nations Conference on Trade and Development (UNCTAD) from 2005-2014.
Supachai also called for the WTO and UNCTAD to create a code of conduct for the digital technology giants, naming US titans Google, Facebook and Apple alongside Alibaba as companies that, he feared, could potentially control the world economy.
These companies have Big Data that no government can afford to have and they conduct many businesses that have created disruption globally and could become even more disruptive in years to come, he warned.
Asked whether collecting tax from these multinational firms could tame them, Supachai said tax collection is only one aspect of the solution.
Tax on e-commerce deals
The Revenue Department plans to impose a 15 per cent tax on e-commerce transactions. The draft of the e-commence tax law is expected to be finalised soon.
Supachai said the government should not have too high an expectation that Alibaba will help small and medium-sized enterprises to sell more goods.
“It has two-way e-commerce platforms as Chinese companies will also sell more products to Thai consumers,” he said.
Supachai suggested that the government should ensure that Thai investors can enter into partnerships with the multinational technology firms that want to do business in Thailand.
“It doesn't mean that we have to control them but we must see through them,” he said, referring to the need for a better understanding of how their operate.
He also cited the case of the European Commission last month fining Google 2.42 billion euros for breaching European Union antitrust rules.
Addressing the same forum, Surin Pitsuwan, former secretary-general of Asean, raised his concerns over rising anti-globalisation sentiment in the West – where the concept originated.
He said ordinary people in the United States were feeling frustrated about the impact of globalisation, as many of them had lost their jobs or were in the middle income group that has seen their income drop, he said.
He urged members of Asean to open more markets among themselves in order to increase intra-Asean trade. Currently, the share of intra-Asean trade is only 25 per cent, compared with 75 per cent of Asean’s exports to outside world .
Surin was optimistic that Asean could play a mediating role in geopolitical conflicts in Asia where big countries, such as China, India, Japan and South Korea, have not yet been able to institutionalise conflict resolution platform.-