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11
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
55
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
88
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
99
• 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
1414
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
1515
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
1616
Specialization Quality/Price Competitiveness Strategic Partnership Economies of Scale
RecommendationsRecommendations
1717