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29 June 2015
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Australia urges more trade liberalisation under TAFTA



AUSTRALIA is keen on liberalisation of the trade in agricultural products and professional services after the Thailand-Australia Free Trade Agreement (TAFTA) has been in effect for 10 years, while foreseeing strong trade growth between the two nations.

At an Australia-Thailand Business Forum yesterday, Greg Wallis, Australia’s senior trade commissioner to Thailand, said bilateral trade was expected to grow by 20 percent between now and 2020, thanks to closer ties and further trade liberalisation. Australia has called for Thailand to ease its safeguards for agricultural products, while liberalising service sectors to attract more investment.

With regional integration, Thailand will be considered a centre of trading and investment in Asean, and the Kingdom should adapt by liberalising its market more fully.

Wallis said liberalisation for agricultural products such as beef products and for professional services including architecture, engineering, and legal and financial consultancy in Thailand would enhance business growth between the countries.

Thailand’s import quotas have blocked Australia’s opportunities to export beef, and legal difficulties obstruct the provision of professional services, he said.

Thai and Australian beef are of different grades and compete in different markets.

Thai beef is mostly of regular quality, while Australia’s is a premium grade, Wallis noted.

The forum heard there were still wide-open investment opportunities in education, healthcare, human resources and information technology in the Kingdom, which Australian interests would like to invest more in.

Somkiat Tangkitvanich, president of the Thai Development Research Institute, said the liberalised trade in beef products could hurt Thai farmers.

“Without preparation, domestic farmers would suffer from such an action, since the price of domestic beef would fall in order to compete with a higher quantity of imported beef that is of better quality.

“The adjustment needs to be done piece by piece, since Thai farmers are slow to react to changes,” he said.

‘Retain some tariffs’

Tariffs on imported wine, beverages and tobacco from Australia should be maintained. The duties from those products are one of the major sources of income for the government, he said.

However, to increase Thai farmers’ competitiveness and promote more trade under the TAFTA, Thailand should reduce the high level of protection and increase quotas for some products, while price subsidies should be phased out in the near future and more focus placed on improve the quality of products.

Somkiat also called on the government to support domestic products while utilising Australia’s technical assistance.

The government should support more domestic dairy products including milk, ice cream and cheese.

These products are of high quality and can compete with foreign products, he said.

In addition, many Australian companies have long experience and in technological advancement to upgrade industry capacity from a technical perspective.

Therefore the government could explore the possibility of cooperating with them to develop the Kingdom’s infrastructure and industries under the FTA.

According to Australian data,since the TAFTA was implemented in 2005, trade between the two countries has increased by more than 80 percent. Last year, exports from Thailand to Australia were worth 10.94 billion Australian dollars (Bt286 billion), while Thailand’s imports from Australia were valued at A$5.17 billion.

However, the agreement is still under-utilised, with fewer than 30 percent of exporters and around 10 percent importers taking advantages of the TAFTA.

Meanwhile, at a separate event, Commerce Minister General Chatchai Sarikulya said Thailand and India had recently agreed to proceed with talks on a comprehensive FTA, as the existing pact only covers trade in 83 goods for 10 years.

Thailand will also start the first round of FTA talks with Pakistan next month, and with Turkey in October.


First published in The Nation, 26 June 2015