The Commerce Ministry will tomorrow propose to Parliament that it act on six trade agreements the ministry says are crucial to stimulate trade growth.
Parliament will be asked to implement the free-trade agreement with Peru, ratify revisions of the bilateral FTAs with Australia and New Zealand as well as the Asean-China and Asean-South Korea pacts, and authorise bilateral negotiations between Thailand and Chile.
Deputy Commerce Minister Alongkorn Ponlaboot said that if Parliament ratified the five agreements, it would be a big step for Thailand to promote trade growth. Urgent ratification was needed to show that Thailand's trade would grow smoothly despite duplication in the processes for implementing international agreements.
Article 190 of the Constitution requires the government to seek a parliamentary mandate before negotiating and signing any agreement with a foreign country. This has created delays in the implementation of free-trade pacts.
Parliament approved the signing of the Thailand-Peru FTA last September. However, some minor details in the agreement have been changed by Peru, so Thailand must get it ratified by Parliament again.
Alongkorn said the pact is expected to be implemented early next year. Two-way trade would rise significantly after the FTA comes into effect.
Bangkok and Lima started FTA talks in 2003. They have succeeded in their negotiations to reduce import duties for up to 70 per cent of the products traded between them. For Thailand, affected products are pickup trucks, electrical appliances, plastic and plastic products, washing machines, rubber, automotive parts and home appliances. Peru's focus is on such products as fresh shrimp, fish oil and pesticides. Once the FTA is implemented, Thai businesspeople will be eligible for incentives to expand their investments in Peru. The South American country has much potential for Thai investors, having abundant natural resources such as fisheries, forests, oil and natural gas.
Talks on a Thailand-Chile FTA are expected to start by the end of the year after Parliament's approval, Alongkorn said. Chile will be an efficient gateway for Thailand to connect with countries in Latin America, as Santiago has free-trade pacts with 57 nations. For its part, Thailand will also be a gateway for Chile to countries within Asean.
In the first half of this year, bilateral trade between Thailand and Chile was worth US$380.4 million (Bt12.1 billion). Thailand has always enjoyed a trade surplus with the country. Potential export products from Thailand include cars, cement, and electrical appliances.
In addition, Thailand will revise the bilateral trade pacts with Australia and New Zealand after three years of implementation. The revision will be focused on service liberalisation, safeguard measures, competition policy, and government procurement.
A revision of the Asean-China FTA clarifies and reduces obstacles imposed by the rules of origins. After ratification, Thai exporters are expected to reap more benefits from the pact.
Asean and South Korea have agreed to increase the number of highly sensitive goods on the list for Laos so that the country will have more protection for some products, including passenger cars, motorcycles and parts, video games, and game machinery. However, Thailand will not be impacted by this amendment as it has an agreement with Laos under the Asean Free Trade Agreement.