By SUCHAT SRITAMA
EABC president Rolf-Dieter Daniel told The Nation that although the global economy had not fully recovered, emerging countries in Southeast Asia and beyond had entered into a race for free-trade agreements (FTAs) – with all of them aiming to be important foreign investment destinations.
Singapore and Vietnam have already signed FTAs with the European Union, while the Philippines has made significant progress in bilateral trade negotiations with the EU over the last year.
Daniel said that only Thailand had not been able to further its trade prospects with the EU in this way despite pushing hard, as both sides had paused the talks. He said the Thai government should however consider what was needed to secure long-term investments, and should improve the country’s competitiveness.
“First, the government should improve transparency on government procurement projects, also in most service sectors. Foreigners can invest no more than 49 per cent [in a Thai business]. In the current economic environment, the service industry is the key driver of economic growth and Thailand could gain from this trend if it liberalised the service sector,” he suggested. The EABC strongly urges the government to relax some laws to make investments easier for new companies, he added. Meanwhile, European companies are eager to bid for the government’s current projects, such as for trains and railroads, information and communications technology, and the Internet and telecommunications.
“There are many innovative European companies that can supply products according to certified European standards, like railroad and infrastructure companies. They are interconnecting the entire Europe region. If Thailand works according to European standards, it can become a regional hub, offer better standards and interlink with the Asean rail network,” Daniel said.
The European business sector also urges the government to simplify work-permit and immigration procedures and pursue customs reforms, in order to attract more foreign investors.
Moreover, private Thai companies are urged to work with European firms to improve production systems, increase product standards, and reduce production costs, he said, adding that using European equipment and machinery could help operators expand their markets globally.
“The vibrancy of Thailand and its intellectual and friendly workforce draws partners from around the world. Being open to investments entails more than temporary trade promotion; [it means] safeguarding and ensuring that existing industry will expand the Thai economy further,” the association president said. The EABC is scheduled to launch its “2016 Business Position Paper” on March 30, with the paper comprising recommendations and suggestions on FTA negotiations, strengthening EU-Thai economic relations, European long-term investment, and the overall improvement of 10 sectors.
“Part of the paper states that Thailand and the EABC must engage in closer dialogue and commit to joint effort and collaboration in both political will and at the economic level to help improve Thai-EU economic relations,” Daniel said.
Thailand will benefit from foreign business partners in the areas of technology, engineering and life sciences, where many industries and companies are required, he added.
At the regional scale, the EU is Asean’s second-largest trading partner and largest source of foreign direct investment (FDI).
Last year, Asean-EU two-way trade stood at €201 billion (Bt8.2 trillion), an 11-per- cent increase year on year, based on EU statistics. In 2014, FDI inflows from the EU increased by 31.5 per cent to US$29.3 billion (around Bt1 trillion), accounting for 21.5 per cent of the total FDI inflows into Asean.
Thailand is the EU’s third-largest trading partner and, despite the country’s internal challenges, total trade exceeded €30 billion in 2014. The EU imported goods from Thailand valued at €18.5 billion, while EU exports to the Kingdom were valued at €12.4 billion, resulting in a positive trade balance for Thailand of more than €6 billion.
The EU is also the second-largest source of FDI for Thailand.
Daniel added that the EU wanted to intensify its relationship with Asean and help those in the region support the further development of several FTAs, besides reaffirming its commitment to deepening economic relations between the two regions.
Asean economic ministers and the EU trade commissioner met in Chiang Mai early this month.