Firms losing out by failing to cash in on FTA benefits, TDRI says

TDRI president Somkiat Tangkitvanit said yesterday that the study on obstacles to trade under FTAs found that though Thailand had signed 11 such accords, Thai businesses had yet to take full advantage of them. This had lost them huge business opportunities.

Last year the private sector applied for tax benefits for only 49 per cent of Thai exports to FTA partners, achieving tax reductions totalling Bt118 billion. If these benefits had been fully enjoyed, that figure would have been Bt248 billion.

The importers also used 52 per cent of the right and gained benefits of Bt90 billion, instead of Bt139 billion if fully used.

Somkiat urged the government to encourage businesses to reap more benefits from FTAs, with the focus on those industries that had hardly used them. It should be raising businesses’ awareness on this issue.

He said the trade obstacles currently being encountered under FTAs would decline in the future, but non-tariff measures (NTMs) would increase, and this would reduce the benefits Asean countries should be enjoying from trade agreements.

The study found that in Asean countries, Indonesia uses the most NTMs, on 62 out of 100 products, followed by Malaysia at 44 products, Singapore 43, Vietnam 32, Brunei 27, the Philippines 20, Thailand 11, Myanmar 10, Cambodia six and Laos five.

In Indonesia, the products that often face NTMs are medical, petrochemical, electronics, plastics and food, while those in Malaysia are petrochemical products, plastics, food, vehicles and paper.

Thailand, Singapore, Brunei and the Philippines use NTMs to protect consumers and the environment. Indonesia, Malaysia and Vietnam use such barriers to protect local producers.

NTMs include the requirement of too many documents, time-consuming processing and frequent regulatory changes, including customs and excise-tax measures.