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Japan, Thailand closer to free
trade deal
By Daniel Ten Kate,
ThaiDay
BANGKOK - Thailand and Japan have
reached a basic agreement on a free trade deal
after the two sides agreed to postpone
negotiations on the elimination of tariffs for
automobiles with engines larger than 3,000cc until
around 2010. After a senior Japanese minister met
with Thai Prime Minister Thaksin Shinawatra on
Monday at Government House, chief Thai trade
negotiator Pisan Manavapat announced that the
breakthrough on automobiles had clinched the
agreement. "This agreement sends a very strong
signal that Thailand and Japan have broadened
their economic partnership in all areas, not just
market access," Pisan said.
Technical
trade teams from both countries will now work to
draw up a formal trade treaty, which both sides
said could be signed in six months to a year. The
ministerial-level agreement signals the end of a
tense round of negotiations that almost saw the
bilateral talks with Thailand's largest trading
partner collapse altogether. As it stands now, the
trade deal would cover more than 7,000 items,
representing more than 90% of the total trade
between Thailand and Japan. Thailand would be able
to export an average of 42 billion baht (US$1
billion) worth of products to Japan annually after
the FTA deal takes effect, said Pisan.
Thaksin is scheduled to fly to Japan later
this month to announce the basic agreement with
his Japanese counterpart, Junichiro Koizumi, ahead
of an official signing ceremony sometime next
year. Thai officials expect the deal to take
effect in September 2006. To complete the
agreement, Thailand agreed to gradually reduce its
tariffs on automobiles with engines larger than
3,000cc from the current level of 80% to 60% by
2009. Trade negotiators will sit down again to
determine a schedule by which the tariffs will be
eliminated altogether.
"The message we got
is that possibly the Thai side can eliminate
tariffs on autos larger than 3,000cc sometime
between 2014 and 2016," said Keita Nishiyama, a
senior official in Japan's Economy, Trade and
Industry Ministry. Thailand has not agreed to open
up its market for automobiles with engines smaller
than 3,000cc.
On other contentious points,
Thailand agreed to drop tariffs on steel products
within 10 years, and tariffs on most auto parts
will be eliminated by 2011. Thai negotiators had
been fighting for increased access to Japan's
highly protected agricultural market in response
to concessions in the steel and auto sectors. To
that end, Japan agreed to reduce tariffs on
heat-treated chickens, shrimp and some fruits, and
set import quotas for other fresh fruits and
vegetables, canned food and canned fruit juices.
Sugar, one of Thailand's main exports, was
not included in the agreement, though Pisan said
the issue would be revisited in five years. Pisan
also said that Japan's commitment to reduce
non-tariff barriers, such as rule of origin and
hygiene requirements, helped bridge the gap
between the two sides. "There will continue to be
difficulties and obstacles, but now we have an
agreement to try and rectify them as soon as
possible."
Thai officials plan to closely
monitor the steps Japan takes in the next two or
three weeks to clear away non-tariff barriers on
Thai agricultural products. A failure to do so
could delay the signing of any agreement and lead
to further talks, said Thai trade officials.
(Copyright 2005
ThaiDay) |
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