Mon, November 29, 2021

business

Thailand braces for Trump dumping TPP


Country needs to focus other bilateral and regional deals next year, officials say

Thailand should get ready to renegotiate the framework of the US-Asean free-trade agreement (FTA) after US President-elect Donald Trump announced yesterday that he would scrap the Trans-Pacific Partnership (TPP) deal in his first 100 days in office, top government and private sector officials said. 
Thailand and the US should also negotiate a bilateral deal under Trade and Investment Framework Agreements (TIFAs) in the first quarter of next year, they said. Thailand is due to host a meeting on trade and investment expansion and to tackle trade barriers between the two countries.
Trump said yesterday that he will tear up the TPP deal – initiated by outgoing President Barack Obama – as soon as he arrives at the White House in January. 
Nopporn Thepsithar, chairman to the Thai National Shippers Council, said this decision would offer advantages as well as disadvantages for Thailand. 
On the positive side, Thailand will not be left behind other TPP members because it has yet to join the pact. There are currently 12 TPP members, including several in Asean –Vietnam, Malaysia and Singapore. 
This way, Thailand will have time to prepare higher standards that can be used in future free-trade deals. 
But he said Thailand should not lose incentive to upgrade its standards on trade, investment and trade, and intellectual property.
However, Nopporn pointed out that once the US ends the TPP arrangement, it would struggle to form other bilateral trade ties to act as a counter-weight to China. He also noted that the United States was likely be tougher in these new negotiations, as Trump has repeatedly said that previous trade deals created losses for his 
country. 

Tougher negotiations expected with US 
As for other bilateral FTAs, Trump would likely push for more benefits for his country, which could prove to be challenging for other bilateral partners. 
Nopporn said Thailand should also negotiate with the US under other multilateral trade agreements, such as the US-Asean FTA or a new FTA among Asia-Pacific countries to boost trade growth and trade liberalisation.
Despite the scrapping of the TPP, Thai enterprises still need to meet higher standards on global trading, innovation, intellectual-property-right protection, the environment and more stringent trade regulations.
Sunanta Kangvalkulkij, deputy head of the Commerce Ministry’s Trade Negotiations Department, said TPP’s collapse would ease the pressure on Thailand. 
Under the TPP arrangement, the deal was only going to take effect after getting approval from parliament by member countries, whose combined GDP represented at least 85 per cent of the 12 member countries. The US accounted for 60 per cent of that figure alone.
She also pointed out that neighbouring countries that are TPP members, such as Vietnam and Malaysia, would not gain favour from foreign investors. 
But, the situation would encourage other countries, especially those in Asean, to pay more attention to the Regional Comprehensive Economic Partnership, and that was likely to spur quicker implementation.
Once the TPP ends, the US will possibly pay more attention to other bilateral trade deals, Sunanta said. As a businessman, Trump will most likely focus on trade and business benefits for his country and ignore pacts that may create economic losses.

Published : November 23, 2016

By : The Nation