The Nation/ANN | Tuesday, August 7, 2012 11:29
Thailand mulls FTA negotiations with EU
By Petchanet Pratruangkrai
BANGKOK -- Thailand will ask the European Union to put the more than 700 export items that are at risk of losing export privileges in two years into an “early harvest” scheme under a bilateral free trade agreement (FTA).
Thailand is considering starting the FTA negotiations soon after the EU had long proposed them. The EU plans to cut export privileges for its trading partners including Thailand by 2014 under its revision of the Generalized System of Preferences (GSP).
“The country plans to ask for the EU to enforce an 'early harvest' program for Thai goods if the negotiations are completed. Then the GSP cut would not affect our exports and competitiveness as duties would be brought down to zero for Thai goods under the free-trade pact,” Srirat Rastapana, director-general of the Trade Negotiations Department, said last week.
However, the bilateral FTA will be a comprehensive pact covering goods, services and investment.
The EU plans to cut the number of GSP countries to 80 from 176 currently, and that could include Thailand, as it is one of the developing countries considered as having a stronger economy and higher income per capita.
The EU would soon wrap up FTA talks with Singapore, while its talks with Malaysia are progressing smoothly.
It is preparing for negotiations with Vietnam, the Philippines and Indonesia.
Thailand needs to rush to start its free trade talks with the EU so that it will not fall behind in competitiveness.
After the EU successfully concludes a bilateral pact with each ASEAN member state, it would also eventually move to combine them into an ASEAN-EU FTA.
According to the Thai commercial office in Brussels, about 50 Thai products commanding more than half of their market in the EU would be the first to be graduated from the GSP scheme in early 2014.
They include meat products, orchids, papaya, sugar, processed seafood products, canned fruit, processed foods, feed meal, textiles and garments, electronic goods, and vehicles and parts.
The exports of those products to the EU have reached US$1.65 billion (51.94 billion baht), or 2.48 percent of total exports from Thailand to the EU.
In January 2015, the remaining 723 Thai products are expected to exit the GSP scheme.
Trade in Thai merchandise worth US$9.3 billion each year to the EU could be affected.
Countries that were due have their trade promotions dropped would have one year to adjust. Products that would be hardly affected are mainly shrimp, bicycles, footwear, squid, plastic pellets, garments, crude palm oil, canned tuna, and rubber tires.
