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U.S.-Thailand Free Trade Agreement
Background
President Bush and Prime Minister Thaksin Shinawatra announced their intention to negotiate a U.S.-Thailand Free Trade Agreement (FTA) on October 19, 2003. Following consultations, U.S. Trade Representative Robert Zoellick notified Congress on February 12, 2004, of the Administration's plans to start the FTA negotiations with Thailand which commenced in June 2004.
Thailand is the United States' 19th largest overall trading partner ($21 billion), its 16th largest source of imports ($14.8 billion) and 23rd largest export market ($4.9 billion). All this is set to rise even further. The United States is Thailand's single largest trading partner, ahead of Japan, with two-way trade of US $20 billion. The United States is Thailand's second largest foreign investor, following Japan, with total accumulated investment exceeding $16 bilion. Half of U.S. investments are in the energy and petrochemical industries, with the other two largest sectors being automotives and electronics. An FTA with Thailand would enhance this economic relationship and would lead to increased investment oppotunities for U.S. companies in Thailand.
U.S. Chamber Position
The U.S. Chamber of Commerce strongly supports this step toward a closer economic relationship with one of America's most imporant allies in Asia. We believe an FTA with Thailand can be leveraged to promote multilateral and regional initiatives to liberalize trade and investment, and recommend that the Administration include in the FTA a preamble on how the agreement will further U.S. trade lineralization objectives in the WTO and Asia-Pacific region. But just as important, the bilateral FTA could bring tangible commericial benefits to U.S. and Thai corporations. We support an agreement that is comprehensive in scope and fully consistent with the WTO's framework for liberalized trade, including chapters on free trade in goods, free trade in services, foreign direct investment, intellectual property rights, competition policy, agriculture, and government procurement. We also believe the FTA should commit the Thai government to address the rampant corruption problems in Thailand.
Reasons for Launching an FTA with Thailand
- The FTA would help to boost trade with an already strong trading parter - bilateral trade in 2004 reached almost $21 billion.
- As the Treaty of Amity with Thailand expires in 2005, the FTA would extend many of the investment privileges to U.S. companies that would otherwise be eliminated.
- In terms of agricultural, fish, and forestry products, U.S. exports to Thailand last year reached $670 million. With a FTA, U.S. industry estimates that this figure could reach $900 million with reduced or eliminated tariffs and non-tariff barriers.
A comprehensive FTA with Thailand will provide a legal framework for addressing contentious trade issues such as IPR protection and customs administration and added market access for U.S. firms into certain restricted Thai industries, such as telecommunications and financial services. Thai Prime Minister Thaksin indicated that successful FTA negotiations with the United States is a national goal for Thailand and directed his Administration to make every effort to address issues outlined under the TIFA's Action Plan. Other issues of concern, including intellectual property rights, will also be addressed under the FTA.
The U.S. Chamber of Commerce is a leading member of the U.S.-Thailand FTA Business Coalition, a grouping of organizations and companies strongly committed to promoting the negotiation, passage, and implementation of a meaningful and comprehensive bilateral FTA between the United States and Thailand. Made up approximately 100 U.S. organizations and companies from a broad range of industries, the Coalition is the premier voice representing U.S. business interests in the U.S.-Thailand FTA process. To learn more about the Coalition, visit the Coalition homepage at: www.us-asean.org/us-thai-fta/
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