Failure to join TPP cited as obstacle to Korean investment in Thailand
THAILAND’S missing out on the Trans-Pacific Partnership is one of three major obstacles to Korean investment in the country, according to the Federation of Korean Industries.
Investors from many countries are considering relocating their bases from Thailand because it did not join the US-led trade pact, Lee Seung-cheol, vice chairman and chief executive of the FKI, told a luncheon hosted by Thai Deputy Prime Minister Somkid Chatusripitak in Seoul yesterday.
Twelve Pacific Rim nations, which represent nearly 40 per cent of the global economy, signed the TPP agreement in February. They are the United States, Japan, Australia, Mexico, Canada, New Zealand, Chile, Peru, and four of the 10 Asean members – Malaysia, Singapore, Vietnam and Brunei.
Lack of technical personnel and restrictions on hiring foreign workers were cited as the other two major problems that Korean investors are facing in Thailand.
“If Thailand can solve these problems, it will become the most glamorous country for investors in Asean,” Lee said.
About 10 senior executives of Korean companies took part in the working lunch with Thai ministers, senior officials and executives from the Federation of Thai Industries, Saha Group, Charoen Pokphand Group, Kantana Group, Unique Engineering and Construction, and other organisations.
Somkid said Prime Minister Prayut Chan-o-cha had made it clear that his government was interested in the TPP.
Prayut had ordered the Commerce Ministry to study the pact’s pros and cons and meet up with a range of citizen groups to make sure the country could get maximum benefit from joining the pact.
“This morning I also met with a Korean company that said it had a disadvantage compared with firms from other countries in importing raw materials because Korea has no FTA [free-trade agreement] with Thailand.
“But I told them if they have BOI [Board of Investment] incentives, they can use the privileges” to get a reduction in import duties, Somkid said.
Companies investing in targeted industries could let their people stay even longer than the period normally allowed by a work permit.
Somkid said the government was well aware that human resources and the labour force would be problems for the future, so the prime minister has ordered a reform of the education system, especially in the vocational, technical and engineering areas.
Somkid, who is visiting South Korea until today, also held face-to-face meetings with top executives of leading Korean companies including Samsung Electronics, Daewoo, Hana Financial Group, Lotte Duty Free, Posco and Yello Mobile.
An executive of Lotte Duty Free said the company had won a concession from the Thai government to run a duty-free outlet. However, it could not start the operation, since King Power stills hold exclusive rights to run the business at Suvarnabhumi and Don Mueang international airports.
The minister said he suggested opening duty-free outlets in Chiang Mai or Phuket instead.
Daewoo is interested in taking part in the Blue Line and Yellow Line mass-transit projects that the Cabinet is expected to approve by the end of this month. Hana Bank would like to establish a branch in Thailand.
