Be wary of pacts with rich states: Supachai

The TPP will include many requirements and standards imposed by the United States, such as labour rights, that developing countries including Thailand and Vietnam would find it difficult to commit to. The US could also force governments to privatise state-owned agency companies in exchange for market access.
Supachai said Thailand should also carefully consider whether to start negotiating a free-trade agreement with the European Union, as the two parties have different standards on many trade-related issues including protection of intellectual property and drug patents.
“Will it be worthwhile for Thailand to participate in overall market liberalisation in exchange for a cut in export privileges to the EU market? Inevitably, Thailand would definitely lose [benefits under] the Generalised System of Preferences of the EU. Trade under the GSP to the EU accounts for only 2-3 per cent of the total exports from Thailand.”
He suggested that Thailand ask for the Asian Development Bank’s advice and weigh carefully whether to start negotiating FTAs with the European bloc of developed countries.
In addition, to strengthen the growth of Asean, Supachai suggested that its members tighten cooperation on stabilising exchange rates and setting banking standards as well as inspection measures to prevent a financial crunch in the future.
Asean should also have a Mutual Recognition Arrangement to set up region-wide trade-competition and consumer-protection laws. The region may pool its resources to ensure strong economic growth.
A focus on good governance, continual investment in infrastructure development, promotion of technology, and development of the educational systems to produce skilled labour should also be considered to ensure sustainable growth of the region, he said.
The US economy will grow slowly next year, while the EU crisis will expand across the whole continent, Supachai predicted. Thailand and the other Asean countries, therefore, should strengthen their cooperation and get rid off non-tariff barriers to promote trade and regional economic growth.
He said the United States would fall over a “fiscal cliff” late this year resulting from a combination of major spending cuts and tax hikes imposed by its government. The EU economy is also expected to drop by a further 0.5-0.7 per cent this year, after a 0.3-per-cent decline in the first half of this year.
The Unctad head expects that the EU economy could continue to contract by 1.3 per cent next year.