1 chutima bunyapraphasara deputy director-general department of trade negotiations free trade...

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Chutima Chutima BunyapraphasaraBunyapraphasara

Deputy Director-GeneralDeputy Director-General

Department of Trade Department of Trade NegotiationsNegotiations

Free Trade Successes

& Thailand

Automotive Industry

22

Global Economic Global Economic SituationSituation

WTO Negotiation

sSlow

Global Trade

Liberalization

More RTAs/FTAs

WTORTAs/FTA

33

050

100150200

250300

196019651970197519801985199019952000

Rapid Increase in RTAs and FTAsRapid Increase in RTAs and FTAs70% 70% asas Bilateral FTAsBilateral FTAs

Source : WTOSource : WTO

RTAs and FTAsRTAs and FTAs

44

• Removal of Trade Obstacles (Tariffs and NTMs)• Expand Trade and Export Opportunities ( both existing and new markets)• Attract Foreign Direct Investment• Increase Competitiveness and Efficiency • Promote Long-term Relationship• Raise International Bargaining Power

FTAFTA ObjectivesObjectives

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Thailands’ Future Goals

Top 5 Top 5 Investment Investment Destination Destination

in Asiain Asia

Top 20 Top 20 World ExporterWorld Exporter

Strong and Sustainable GrowthDual Track Policy

Trade and Investment Hub in Asia

66

8+1 FTAs

Peru

Japan

Australia

New Zealand

BIMST-EC

China

India

Bahrain

USA

• Total trade with ThailandTotal trade with Thailand 43.8%43.8%• Include AFTA 62.5%Include AFTA 62.5%

77

FTA Current StatusFTA Current Status//Target Target DateDate

Start Negotiati

on

End Negotia

tion

Early Harves

t

China

Japan

U.S.

Australia

New Zealand

India

Bahrain

Peru

BIMST-ECFramework

2004

2005

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FTAs will be Comprehensive - include FTAs will be Comprehensive - include Automotive Automotive Sector, with flexibility Sector, with flexibility for sensitive goodsfor sensitive goods

FTAFTAss deal only with border measures deal only with border measures, , such as such as

tariff tariffss , custom administration, and im , custom administration, and im port port

licensing, licensing, and and will not address domesti will not address domesti c taxes c taxes,,

such as excise tax and luxury tax such as excise tax and luxury tax RuleRuless of Origin of Origin (ROO) will (ROO) will determine if determine ifproductproductss will receive preferential treatment will receive preferential treatment

FTAFTAss and Automotive and Automotive SectorSector

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• Tariff Reduction For passenger cars, most of the tariffs wil

l be reduced to 30% in 2005 andphasedout tozero by 2010.

Tariff on passenger cars of a cylinder capac ity exceeding 3 ,0 0 0 c.c., including am

bulances, carsof j eeptype, andother s, willbe removedi mmediately.

Tariffs on Automotive Parts and Components will be phased out to zero by 2010

• Rules of OriginChange of Tariff Classification (CTC) +Regional Value Content ( RVC) of 40% (like AFTA formula)

- Thailand Australia FTA- Thailand Australia FTA

1010

Negotiations on-going – but will Negotiations on-going – but will probably take probably take ASEAN-China ASEAN-China FTA modality.FTA modality.

Normal Track/ Sensitive ListNormal Track/ Sensitive List Tariff Schedules have yet to be Tariff Schedules have yet to be determineddetermined

Rules of Origin: Rules of Origin: Local Content 40 per centLocal Content 40 per centProduct Specific RulesProduct Specific Rules

Thailand/Thailand/ - ASEAN China FTA- ASEAN China FTA

1111

Negotiations on-going Some automotive parts and

components already in Early Harvest Agreement with the rest under negotiations

Rules of Origin (to be determined)• Local Content 40 percent• Substantial Transformation

Thailand-India Thailand-India FTAFTA

1212

Market Access Customs Procedures and Regulations

Technical Regulations/MRA Cooperation on SMEs and Technical

Training and Transfer

Thailand-Japan and Thailand-Thailand-Japan and Thailand-U.S. U.S. FTAFTA

1313

Increase exports of a utomobiles an d parts, especially light trucks, to F

TA partner countries and world marketsEnhance Competition and Efficiency of the Automotive SectorAttract more FDIPromote Cooperation and Networks- Know-how, R&D, and Innovations

FTAFTAs Potential Benefitss Potential Benefits

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Increase vulnerability from outside forces. Increase Competitive level – Crowding out

Effects. Social and Cultural Repurcussion (e.g. job loss,

misplace resources, etc.)

FTAFTAs Potential Threatss Potential Threats

• But Short-term and Adjustable

+• High Costs of

Non-participation

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RecommendationsRecommendations

Greater Cooperation and Coordination Greater Cooperation and Coordination between All Stakeholders in both the Public between All Stakeholders in both the Public and Private Sectors in FTAs negotiations and and Private Sectors in FTAs negotiations and beyondbeyond Joint Efforts to raise productive, Joint Efforts to raise productive, efficiency, and international competitiveness efficiency, and international competitiveness (R&D, market and skill development, etc.)(R&D, market and skill development, etc.) Create a modern and globalized workforceCreate a modern and globalized workforce

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Specialization Quality/Price Competitiveness Strategic Partnership Economies of Scale

RecommendationsRecommendations

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