Make Thailand trading HQ, hub for Asean: Pridiyathorn

Speaking at the “AEC+3 Summit and Expo”, Pridiyathorn said that to capitalise on the Asean Economic Community, the country had to eliminate the tariff and non-tariff barriers that discouraged foreign companies from setting up trading headquarters here. 

“We have a lot of tax barriers and we also have a lot of non-tax barriers in the form of visa requirements, work-permit regulations, and the 90-days issue, which we will definitely eliminate in order to attract foreign headquarters, including international trading companies, to Thailand,” he said.

Pridiyathorn told reporters on the sidelines of the seminar that Thailand’s economy could expand by 5 per cent in 2015 if all went well with the government’s transport-infrastructure projects, which will begin by the first quarter of next year.

He said Thailand was already the champion of the region in terms of consumer products, so if a lot of trading headquarters were set up here, the country had the potential to become a trading hub for the Asean region. However, it still has to improve the pace of its regulation-amending process to realise this goal.

“Being a trading hub for the region is our aim, and we are competitive enough, but we need more trading companies and headquarters to come here in order to convert Thailand into a trading nation,” he said.

“We have progressed from pure agriculture before 1960 to agriculture plus industrial plus services, and the next step is to become a trading nation. That is the only way Thailand will go.” 

Panellists at the AEC+3 Summit and Expo agreed that lowering tariff and non-tariff barriers would be key to successful Asean economic integration, which will be launched by the end of 2015.

Chris Clague, senior analyst at the Economist Intelligence Unit, said the Asean region was among the world’s leading economies, in seventh place (higher than Brazil but lower than the United Kingdom) with a combined nominal gross domestic product of more than US$2.2 billion (Bt72 billion) in 2013. The EIU expects an average growth rate of 5.5 per cent for the region over the next four years, which will propel it to the fifth place with a nominal GDP of around $4 billion by 2018.

 

Hard work ahead 

However, there is hard work left to be done in terms of the pursuit for a single market and production base, since progress still needs to be made on tariff barriers and labour issues with the Mutual Recognition Arrangement. Competition policy is still at its initial stages, the region is behind in transport infrastructure, and whether economic development will be equitable still remains to be seen, he said.

Kirida Bhaopichitr, senior economist at the World Bank, said the region was making good progress in terms of free trade of goods. Six member countries have already reduced their tariff barriers to zero, while Cambodia, Laos, Myanmar and Vietnam will do so by the end of 2015. Nevertheless, there is still work to be done in terms of free flow of services, investments, and labour, where only eight professions are allowed to flow freely in the region.

Jayant Menon, lead economist at the Asian Development Bank, said the real differences the AEC will make would depend on implementation post-2015. The most important factors are the lowering of barriers and regulations, which have to be a commitment of the member nations, and the private sectors within those countries need to push their governments to amend the rules that are hampering the integration process.