RCEP seen as more important than TPP for now
The Nation, Thailand
RCEP seen as more important than TPP for now
By Nophakhun Limsamarnphun and Petchanet Pratruangkrai
17 August 2015
Deputy Commerce Minister Apiradi Tantraporn has suggested that Thailand should eventually join the US-led Trans-Pacific Partnership, which will control about 40 per cent of global gross domestic product and one-third of world trade if approved.
But until the TPP is finalised, Thailand should focus on the Asean-led Regional Comprehensive Economic Partnership (RCEP), she said.
Deputy Commerce Minister Apiradi Tantraporn has suggested that Thailand should eventually join the US-led Trans-Pacific Partnership, which will control about 40 per cent of global gross domestic product and one-third of world trade if approved. But until the TPP is finalised, Thailand should focus on the Asean-led Regional Comprehensive Economic Partnership (RCEP), she said.
"We can wait for the TPP to be firmly established by the first 12 member countries [which do not include Thailand]. Right now, pharmaceutical patents and biodiversity remain the major issues for Thailand if we’re to negotiate to join the TPP," she said.
The potential TPP partners are the United States, Canada, Australia, New Zealand, Chile, Japan, Singapore, Malaysia, Vietnam, Mexico, Peru and Brunei. The RCEP will include the 10 members of Asean plus China, Japan, South Korea, India, Australia and New Zealand.
Some have said that since three Asean members - Malaysia, Singapore and Vietnam - are set to be among the founding members of the TPP, Thailand could be put at a disadvantage if the controversial pact is approved. China will also not be a member of the TPP as things currently stand.
But Apiradi said: "The TPP’s strength is its huge market footprint, but in my opinion, the RCEP free-trade area is more important to Thailand. It is also comparable to the TPP, also accounting for 40 per cent of world trade. The RCEP has a larger population of 2.6 billion.
"In addition, production facilities and supply chains of several key industries are currently established in Thailand, so they could benefit more from the RCEP’s tariff preferences and other privileges.
"RCEP negotiations are ongoing and we expect an agreement on tariffs and rules of origin soon, possibly next year. As a major production base in mainland Asean, we have a competitive advantage, especially in view of the land-transport connectivity such as the East-West Corridor linking Thailand with Cambodia and Vietnam on one side and with Myanmar on the other.
"For the North-South Corridor, we could be linked with Myanmar, southern China, Laos and India by highway."
Meanwhile, Apiradi expressed confidence that the recovery of automotive, jewellery and food exports in the remaining months of this year will ensure that overall export value will not contract by more than the 3 per cent year on year anticipated by the ministry.
"In fact, the latest figures show that our export performance in the first five months of this year was not too bad among the world’s top 20 exporting nations. We faced a smaller export contraction than Malaysia or Singapore," she said.
Despite China’s devaluation of the yuan, Apiradi said Thai exporters should continue to promote the shipment of food, jewellery and other products to Chinese cities such as Shanghai, where quality Thai products still have a strong market potential.
"On the other hand, a big portion of Thai exports to China are raw materials and parts that are used for products re-exported by Chinese companies, so the impact from the yuan’s devaluation should be minimal." It could even be positive, she said, since China should be able to export more because of the cheaper currency. "In addition, we will boost exports to India with a focus on consumer goods and jewellery among other products in cities such as Chennai, Kolkata and Bangalore."
As well, she noted, "Figures show that our market share in the US has recovered to 1.28 per cent from last year’s 1.16 per cent, and in Japan to 3.1 per cent from last year’s 2.68 per cent. "In the US, we have benefited from the return of GSP [Generalised System of Preferences] privileges. Exports to Europe are not good yet because of the Greece crisis, but we could export more food and other items to Russia because of Western sanctions," she said.
