Guidelines for conducting a Free Trade Agreement (FTA) to lead Thailand becoming a regional trade and investment hub in the region

Abstract

This research is aiming to study the Free Trade Agreement (FTA) in the new global context especially the FTA that the developed countries signed with ASEAN countries and comparing this new pattern of FTA with international standard and international trade principles. The research also analyzes Thailand’s strengths, weaknesses, opportunities, and threats as well as seeking opinions and views of related stakeholders if Thailand conduct this new pattern FTA and will propose the guidelines for conducting new pattern FTA with a view to leading Thailand to be a regional trade and investment hub as stipulated in Thailand’s National Strategy. The research is conducted by gathering primary information from interviewing various stakeholders interview namely, public sector, private sector, academics, farmers, and civil society. The secondary information is gathered from reviewing of literature, documents, reports, feasibility studies on positive and negative impacts of conducting existing FTA as well as experiences from attending the international trade meeting. The information is analyzed and compared with international trade theories and principles in order to formulate the guidelines for conducting a Free Trade Agreement to lead Thailand to be a regional trade and investment hub in the region.

          The research found that FTA is one of the important factors to lead Thailand to be a regional trade and investment hub in the region as stipulated in Thailand’s National Strategy as it would increase foreign direct investment attractiveness in particular, as a result of tariff preferences from reducing tariffs and non-tariff obstacles and liberalization of trade in services and investment with FTA partners. Moreover, it will connect goods and services from Thailand with global value chain. The new pattern FTA will have a high standard as well as higher level of trade liberalization and stricter trade regulations beyond the WTO agreement. The FTA in the new global context would include new areas related to trade in all dimensions, for instance, liberalization of trade in goods, services and investment, intellectual property, government procurement, competition, labor rights protection, environmental protection, state-owned enterprise, e-Commerce, where Thailand may have some reserve and limitations with respond to the readiness of the government and private sector as well as the attitude to adopt to the changing global environment.

          Therefore, this research provides policy recommendations which include formulating proactive and passive strategy for conducting the future FTA of Thailand, revising related laws and regulations in order to comply with the international trade regime to appropriately facilitate the Thai businesses, as well as developing efficient human resources by enhancing necessary knowledge and skills for national development. In addition, the research also provides practical recommendation to conduct studies on positive and negative impact of new pattern FTA to Thailand prior to starting the negotiation as well as raising awareness and creating undertaking with relevant stakeholders.

Key words: Free Trade Agreement (FTA)