Conclusion of Thai-India FTA postponed to 2013
The conclusion of the long-awaited comprehensive free-trade agreement between Thailand and India will possibly be postponed to 2013 instead of this month because both sides have yet to agree on several issues, the Trade Negotiations Department said.
Meanwhile, the department is also giving careful consideration as to whether it should go ahead with the Thai-European Union free-trade talks after related enterprises and consumers have voiced concerns about certain issues, mainly trade in pharmaceuticals and alcohol.
Delaying the conclusion of a comprehensive Thailand-India FTA could result in bilateral trade not meeting the US$9-billion (Bt275.69 billion) projected expansion by 2014. However, it is believed the pact will be wrapped up by early 2013.
Piramol Charoenpao, director-general of the Trade Negotiations Department, said that Thailand would not rush into finalising a deal with India if the benefits are not satisfactory to both sides.
“The department recently informed Prime Minister Yingluck Shinawatra about postponing a final decision on the Thailand-India agreement because the benefits are not balanced. The prime minister has acknowledged this and will not push to conclude the talks during her visit to India,” Piramol said.
Yingluck is scheduled to attend the Asean-India Leaders Summit in New Delhi on Thursday to Sunday. Initially it was expected that Yingluck and her Indian counterpart, Manmohan Singh, would announce the completion of the pact during this summit.
Since 2004, the two countries implemented the Early Harvest Scheme, under which tariff is waived on 82 items. This scheme now covers 84 items, while the FTA pact is expected to cover more items as well as the liberalisation of service and investment. However, so far, India has only agreed to open its market for 59 items, while Thailand has decided to eliminate tariff for 150.
THAI OBJECTIONS
Hence, Thailand needs to convince India to include more items under the trade liberalisation scheme. India, however, wants Thailand to let more Indian professionals in though the Thai private sector has objected, because it would cut down on employment opportunities for Thai people.
In addition, Piramol said that the Thai government would need to carefully consider whether it should move ahead with talks about signing an FTA with the EU. The department has organised a public hearing on issues concerning pharmaceuticals, alcohol and cigarettes.
“We can relax on the Thai-EU FTA, though the department will pay careful attention to the issues and consider whether to start official negotiations,” Piramol said.
However, the department and related private enterprises agree that a Thai-EU FTA is needed because Thailand is losing export privileges under the Generalised System of Preferences that the European Union has granted to other developing nations. Also, the bilateral pact should make Thailand more attractive to European investors, otherwise they might opt for Malaysia, which already has an FTA with the EU, she added.
