Trade with Chile to double as FTA starts
ANNUAL trade between Thailand and Chile should double to US$2 billion (Bt71 billion) in the next three to five years, thanks to the free-trade agreement (FTA) between the countries, which comes into force today.
“Bilateral trade and investment should grow after the liberalisation of both markets, since Chile can be a gateway for Thailand to penetrate Latin American countries.
“While it will help Thailand open opportunity to be part of the Trans-Pacific Partnership in the future, as Chile is already part of this, the world’s largest trade bloc,” Commerce Minister |Apiradi Tantraporn said yesterday.
The free-trade pact with Chile is Thailand’s second bilateral FTA with a Latin American country – the other being with Peru – and the seventh overall, after the agreements with China, India, Japan, Australia and New Zealand.
The pact should also help increase the Kingdom’s trading competitiveness with key rivals, including China and Vietnam, as Thailand has negotiated better benefits than those contained in Chile’s FTAs with those two countries, she said.
Thai rice should also gain greater market access to Chile, as import tariffs for the produce will be reduced to zero within five years, she added.
Besides the trade in goods, the FTA will also cover service-sector liberalisation, while negotiations between Thailand and Chile on investment liberalisation will be held within the next two years.
Under the pact, tariffs for 90 per cent of trade in goods – 7,129 out of a total of 7,855 items – are being cut to zero immediately. For another 296 items, tariffs will gradually be reduced to zero over a three-year period, while those on a further 283 items will fall to zero in five |years.
For the remaining 147 items, which are regarded as sensitive goods, import duties will be brought down to zero in eight years’ |time.
Under service-sector liberalisation, Thai enterprises will be able to hold 100-per-cent ownership in service businesses in Chile, in sectors such as legal services, consultancy, engineering, computer services, retail and wholesale, and services related to the production sector.
Apiradi said that Thai massage, Thai kick-boxing and other recreational services in which Thais have high expertise, should be able to open up more to businesses in Chile, thanks to the pact.
She also suggested that Thai businesses and investors urgently explore the Chilean market, as the country is rich in natural resources and is a trading centre in South America.
High potential goods
Thai goods with the highest export potential to Chile are pickup trucks, cement, electrical appliances, plastic pellets, rubber products, as well as canned and processed foods.
Service businesses with opportunities to grow in Chile are engineering, logistics, energy, mining and retail, hotels and hospitality, sports and recreation.
Chile is Thailand’s third-largest trading partner in Latin America, after Brazil and Argentina, while the Kingdom is Chile’s largest trading partner among Asean countries.
Bilateral trade was worth about $960 million last year, with Thailand enjoying a surplus of about $300 million.
