Elements of Investment Liberalization:Thailand’s Perspectives

Dr. Vilawan Mangklatanakul2 October 2007

Thailand’s FTA experiences

• ASEAN as the first FTA – separate investment agreements for

liberalization and protection.

• Bilateral agreements containing investment chapters:– TAFTA, Thai-New Zealand, JTEPA

• Ongoing negotiations:– Thai-India, Thai-EFTA, ASEAN-China,

ASEAN-Korea, ASEAN-Australia-New Zealand, BIMSTEC

Current Positions of Thailand

• Covers 5 non-service sectors: manufacturing, fishery, agriculture, forestry, and mining and quarrying– Other mode 3 services to be covered

in services chapter/agreement.

• Positive list approach to liberalization

Current Positions of Thailand (2)

• The scope of ‘investment’ covers only FDI

• Prohibit only TRIMS-based performance requirements

Current Positions of Thailand (3)

• Provide MFN for post-establishment stage only

• Scope of dispute settlement mechanisms:– No prior consent– Excludes performance requirements,

pre-establishment breaches

Concluding Remarks

• Dilemma: the need to attract FDI vs the need to protect domestic businesses– To strike the right balance is difficult.

• No perfect model that is appropriate for all negotiating partners.

• Should aim for a cautious and flexible approach which takes into account different levels of development